IT services firm Accenture Plc predicted first-quarter revenue below expectations on Thursday, which was weighed down by IT spending cuts amid high inflation and impact from a stronger dollar.
Foreign exchange headwinds have increased since Accenture's third quarter results, with the U.S. dollar at a two-decade high against a basket of currencies, and up about 16 per cent this year, with rising geopolitical tensions and sharp Fed rate hikes.
Microsoft, Salesforce, and IBM are some of the companies with significant overseas operations that have been impacted by this.
Analysts worry a protracted economic slowdown could dent robust IT spending with the cracks already showing after Salesforce cut its annual revenue and profit forecast, noting spending from clients.
A strong dollar usually eats into profits of IT companies that convert foreign currencies into dollars.
According to data from Refinitiv, the company predicted current-quarter revenue between $15.20 billion and $15.75 billion, compared with analysts' average estimate of $16.07 billion.
The forecast reflects the assumption of about 8.5 per cent negative foreign-exchange impact, according to the company.
Revenue for the quarter ended Aug. 31 was $15.40 billion compared to analysts' average estimate of $15.39 billion, according to data from Refinitiv.