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Today at a glance:
🌐 Accenture: AI And Iran Hit Demand
🚚 FedEx: Premium B2B Pays Off
🛳️ Carnival: Europe Yields Soften
🫒 Darden: LongHorn Carries The Year
1. 🌐 Accenture: AI And Iran Hit Demand
Accenture's Q3 revenue rose 6% Y/Y (3% in local currency) to $18.7 billion ($50 million miss), with GAAP EPS rising 9% Y/Y to $3.80 ($0.11 beat).
New bookings of $19.3 billion fell 2% Y/Y, the first year-over-year bookings decline since Q3 FY25. Shares plunged 18% post-earnings, the worst one-day drop on record, extending the stock's roughly 50% YTD decline.
CEO Julie Sweet flagged two distinct headwinds:
Middle East impact: $100 million Q3 revenue hit plus ~$400 million in sales impact as the Iran conflict slowed decision-making across EMEA. Sweet expects “more impact” in Q4.
Managed services deal slippage: A couple of large opportunities pushed into FY27 for company-specific reasons, creating timing-driven softness.
Accenture announced a $4.2 billion cybersecurity acquisition package: a majority stake in Dragos plus 100% of runZero and NetRise. Sweet called the combination "a first-of-its-kind OT Security platform." The three businesses generate ~$208 million in ARR with 48–53% Y/Y growth. Accenture also launched Accenture Edge, a new mid-market business targeting what it sizes as a $240 billion addressable market, and signaled it will tap the long-term debt market to fund elevated M&A. Total FY26 capital return was raised to at least $9.5 billion. Demand for “large-scale reinvention” continued: 104 quarterly bookings over $100 million year-to-date, up 13%.
Accenture cut the top end of FY26 revenue growth guidance to 3–4% (from 3–5%) and narrowed adjusted EPS to $13.78–$13.90 (from $13.65–$13.90). Q4 revenue forecast of $17.8–$18.4 billion fell short of the ~$18.5 billion consensus. CFO Angie Park said "more of the guided range" is in play, given macro uncertainty.
The stock now trades at its lowest multiple ever, roughly 6x EV/free cash flow. The combined dividend and buyback yield is near 10%. The big question is whether the AI displacement thesis continues to show up in slowing bookings, or whether the capital return profile is starting to make the bear case harder to justify at current levels.