Accenture strikes $4.18 billion cybersecurity deal, shares fall on weak forecast
The logo of Accenture is displayed on a building, on the first day of the annual meeting in Davos, Switzerland, January 15, 2024. REUTERS/Denis Balibouse
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June 18 : Accenture unveiled $4.18 billion in cybersecurity acquisitions on Thursday to push deeper into the booming sector, as a weak sales forecast sent its shares down 14 per cent and underscored the pressure AI tools exert on its consulting business.
The premarket drop followed the company’s fourth-quarter revenue forecast that was below estimates as well as lowered annual sales expectations. Shares of rivals Infosys and Cognizant fell 3.8 per cent and 4.4 per cent before the U.S. opening bell, while Capgemini slid 6.8 per cent in Paris.
Geopolitical and economic uncertainty have in recent months hit demand for IT projects, while concerns that autonomous AI tools could displace traditional software services have weighed on valuations across the consulting sector.
Accenture said it would take a majority stake in industrial cybersecurity firm Dragos and fully acquire asset intelligence company runZero and device security specialist NetRise, in a combined deal that will expand its $10 billion cybersecurity business.
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While cybersecurity budgets remain focused on traditional IT systems, greater internet connectivity and AI use are making factories, power grids and other critical infrastructure more vulnerable to hackers, drawing attention to tools that protect them.
The deals, expected to close in August or September pending regulatory approvals, will add companies with a combined annual recurring revenue of $208 million to Accenture’s offerings.
Accenture now expects annual revenue growth between 3 per cent and 4 per cent, down from its previous forecast of 3 per cent to 5 per cent.
It forecast fourth-quarter revenue between $17.75 billion and $18.4 billion, below analysts’ average estimate of $18.47 billion, according to data compiled by LSEG.
In the third quarter, the company reported new bookings of $19.3 billion, down about 2 per cent from the same quarter last year. Revenue rose 6 per cent to $18.72 billion, missing estimates of $18.75 billion.
Source: Reuters
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