Accenture forecasts Q2 revenue below estimates on IT spending weakness

(Reuters) -IT services provider Accenture (NYSE:) forecast second-quarter revenue below Wall Street targets on Tuesday, anticipating cautious spending by clients as macroeconomic uncertainty remains an overhang.

Shares of the company fell 3% in trading before the bell. They have gained over 28% so far this year, outperforming the benchmark .

Analysts expect IT services spending to remain muted in the near term as businesses typically decide their annual budgets only after February. Accenture itself had pointed to slower budget-related decision-making, especially in tech and media companies.

India’s IT services giant Tata Consultancy Services (NS:) reported weaker-than-expected quarterly results in October, while Infosys (NS:) cut the upper end of its annual revenue forecast as clients were still hesitant to spend on discretionary projects. Both companies are Accenture’s competitors in the outsourcing business.

Accenture expects revenue in the range of $15.40 billion to $16.00 billion. Analysts polled by LSEG had forecast revenue of $16.29 billion.

Its revenue in the first quarter ended Nov.30 rose 3%, to $16.2 billion.