March 28 (Bloomberg) -- Accenture Plc, the world’s second-largest technology-consulting company, forecast third-quarter sales that fell short of analysts’ estimates as the company takes on fewer short-term contracts.
Revenue will reach $7.25 billion to $7.5 billion in the quarter that ends in May, the Dublin-based company said today in a statement. That missed the $7.58 billion average estimate of analysts, according to data compiled by Bloomberg.
After reaching a record high earlier this month, Accenture shares have dropped on speculation that businesses are holding back on spending, said Arvind Ramnani, an analyst at BNP Paribas SA in New York. Oracle Corp.’s quarterly results missed earnings estimates last week, exacerbating investors’ concern, he said.
“Clients are reducing or deferring investments due to ongoing economic challenges impacting their businesses,” particularly in Europe and Asia, Chief Financial Officer Pamela Craig said on a call with investors. The company also said full-year revenue would be in the lower half of its previous forecast for an increase of 5 percent to 8 percent.
Separately, Accenture said Craig, 56, plans to step down from the CFO job on July 1 and leave the company on Aug. 31. She’ll be replaced by David Rowland, 52, Accenture’s senior vice president of finance.
The shares rose 1.5 percent to $75.97 at the close in New York. They have fallen 3 percent since hitting a record close of $78.35 on March 8.
The sales projection marred an earnings report that surpassed analysts’ expectations for profit and was in line with revenue estimates for the most recent quarter, helped by a gain in consulting spending by corporate customers.
Second-quarter net income rose to $1.1 billion, or $1.65 a share, compared with $643.9 million, or 97 cents, a year earlier. Excluding some items, earnings were $1 a share. Analysts had predicted 97 cents, according to data compiled by Bloomberg.
Accenture’s sales growth has been outperforming International Business Machines Corp., the largest provider of technology consulting, which saw that unit shrink 2 percent in 2012. Clients are choosing contracts over longer periods, which may lead to more stable earnings even if the deals don’t produce revenue as quickly, Ramnani said.
“Eventually it increases the level of stability in the business,” said the analyst, who has a hold rating on the Accenture stock. “The chance of projects getting canceled or delayed is probably being reduced.”
Accenture maintained its forecast for 2013 adjusted earnings to a range of $4.24 to $4.32 a share, compared with the $4.28 average estimate of analysts.
“This is a business that we don’t worry about very much, about short-run things,” said Bill Smead, who runs a $340 million fund at Smead Capital Management in Seattle, with about $10 million of Accenture shares. “It’s been a terrific investment.”
IBM, based in Armonk, New York, is scheduled to report quarterly earnings next month for the period ending in March.
(Accenture held a conference call this morning to discuss results. Visit NSN MKDGZU1ATLU2 <GO> for the transcript.)
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