Shares of International Business Machines Corp. (IBM) took a hit Thursday after sector peer Accenture plc (ACN) tightened its full-year sales guidance, sending a chill through the information technology services market.
Accenture released its fiscal third-quarter results before the market opened, and while earnings per share came in ahead of expectations, the revenue picture was a bit softer. The company narrowed its fiscal 2026 revenue forecast to a range of $71.763 billion to $72.460 billion, down from the previous range of $71.763 billion to $73.157 billion. Wall Street analysts had been modeling for $74.006 billion, so the new guidance fell short.
On the bright side, Accenture raised its full-year adjusted EPS guidance to a range of $13.65 to $13.90, compared to the analyst estimate of $13.85. For the fiscal third quarter, the company posted diluted earnings per share of $3.80, beating the consensus estimate of $3.69. But quarterly revenue of $18.700 billion missed the $18.745 billion analysts were expecting.
Accenture Chair and CEO Julie Sweet struck an optimistic tone in her commentary on the results. "Accenture delivered a strong third-quarter, with broad-based revenue growth, a 9% increase in EPS, and $8.2 billion returned to shareholders year-to-date," she said. "Demand for large scale reinvention remains strong—104 quarterly client bookings of $100 million or more year-to-date, up 13%—and we are seeing more large-scale AI transformation programs, while executing our strategy to capture new areas of growth."
Sweet also highlighted Accenture's recent acquisitions in the cybersecurity space, including a majority stake in Dragos and full ownership of runZero and NetRise, calling them "the type of move that defines our strategy."
For IBM, the Accenture news is a reminder of the headwinds facing the IT services industry. IBM shares were trading at $251.01 in premarket trading Thursday, down 4.32%. The company is set to report its own second-quarter financial results on July 22. Analysts are forecasting earnings per share of $3.00 on revenue of $17.85 billion.
IBM has a solid track record of late. In its first-quarter earnings announcement on April 22, the company reported EPS of $1.91, beating the consensus estimate of $1.81 by about 6%. Revenue came in at $15.92 billion, above the $15.66 billion analysts had expected. IBM has now surpassed consensus EPS expectations for eight consecutive quarters.
Still, the market is clearly sensitive to any signs of weakness in the sector. Accenture's guidance trim was enough to trigger a selloff, and IBM is caught in the downdraft. Investors will be watching closely to see if IBM can maintain its streak when it reports next month.
