11:22 AM EDT, 03/20/2025 (MT Newswires) -- Accenture ( ACN ) pointed to a potential slowdown in federal revenue as the Trump administration pushes to cut federal spending, though the consulting firm raised the midpoint of its overall full-year financial outlook.

The Department of Government Efficiency, created by President Donald Trump and being led by Elon Musk, is spearheading federal spending cuts and a plan to pare down the government workforce. These DOGE spending cuts could impact the likelihood of companies securing government contracts.

"The new administration has a clear goal to run the federal government more efficiently," Chief Executive Julie Sweet said during an earnings call, according to a FactSet transcript. "During this process, many new procurement actions have slowed, which is negatively impacting our sales and revenue."

The US General Service Administration has asked federal agencies to review their contracts with the 10 highest-paid consulting firms, including Accenture Federal Services, Sweet told analysts. Federal services accounted for about 8% of Accenture's ( ACN ) global revenue in fiscal 2024.

"The GSA's guidance was to terminate contracts that are not deemed mission-critical by the relevant federal agencies," she said. "While we continue to believe our work for federal clients is mission-critical, we anticipate ongoing uncertainty as the government's priorities evolve and these assessments unfold."

Accenture's ( ACN ) shares fell 6.4% in Thursday trade.

The consulting firm now anticipates earnings per share of $12.55 to $12.79 for the ongoing fiscal year, reflecting a higher bottom end than the previous $12.43 estimate. Revenue in local currency terms is expected to grow by 5% to 7%, bumping up the prior guidance's lower end that called for 4% growth. Analysts on FactSet are looking for EPS of $12.73 and revenue of $68.58 billion for the ongoing fiscal year.

Earnings per share for the quarter ended Feb. 28 climbed to $2.82 from $2.63 a year earlier, just above the consensus on FactSet for $2.81. Revenue rose 5% to $16.66 billion, surpassing Wall Street's $16.62 billion estimate.

"Our second-quarter results demonstrate that we continue to deliver on our strategy to lead reinvention for our clients and return to strong growth in (fiscal 2025), with broad-based growth across markets, industries, and the types of work our clients seek from us," Sweet said in a statement.

New bookings fell 3% to $20.91 billion, almost evenly split between consulting and managed services. Bookings related to Accenture's ( ACN ) generative artificial intelligence offering totaled $1.4 billion.

For the fiscal third quarter, revenue is expected between $16.9 billion and $17.5 billion, versus analysts' estimate of $17.21 billion.

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