IT stocks in action after Accenture reports strong second quarter results

Shares of six IT companies rose by 0.3% to 1.59% after IT services and consulting major Accenture on Thursday reported strong second-quarter results and raised business outlook for fiscal 2022.

Wipro (up 1.59%), L&T Technology Services (up 0.9%), Coforge (up 0.85%), Tech Mahindra (up 0.72%), Zensar Tech (up 0.61%) and Happiest Minds (up 0.3%) were top gainers in IT space.

US-based Accenture reported financial results for the first quarter of fiscal 2022, ended 28 February 2022, with revenues of $15 billion, an increase of 24% in both U.S. dollars and 28% local currency over the same period last year.

Diluted earnings per share were $2.54, a 14% increase from $2.23 for the first quarter last year, which included $0.21 in gains on an investment. On an adjusted basis, EPS increased 25% from $2.03 for the second quarter last year.

Operating income was $2.06 billion, a 25% increase over the same period last year, and operating margin was 13.7%, consistent with the second quarter last year.

Net income for the quarter was $1.82 billion, compared with $1.52 billion for the first quarter last year. Excluding after-tax investment gains of $97 million, net income for the first quarter of fiscal 2021 was $1.43 billion.

New bookings for the quarter were a record $1.66 billion, compared with $1.46 billion for the second quarter last year.

Accenture expects revenues for the third quarter of fiscal 2022 to be in the range of $15.70 billion to $16.15 billion, an increase of 22% to 26% in local currency, reflecting the company's assumption of a negative 4% foreign-exchange impact compared with the third quarter of fiscal 2021.

Accenture's business outlook for the full 2022 fiscal year continues to assume that the foreign-exchange impact on its results in U.S. dollars will be approximately negative 3% compared with fiscal 2021. For fiscal 2022, the company now expects revenue growth to be in the range of 24% to 26% in local currency, compared with 19% to 22% previously. The IT company now expects operating margin for the full fiscal year to be 15.2%, an expansion of 10 basis points from fiscal 2021. The company previously expected operating margin to expand 10 to 30 basis points.

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