Accenture delivered better-than-expected quarterly revenue and also raised its guidance. People’s Bank of China kept its benchmark lending rates unchanged after its latest monetary policy meeting. Amazon workers strike across seven facilities. Shares of Micron saw its steepest decline since 2020. All this and more on the December 20 edition of World Street.
Good surprise
Accenture, the world’s largest IT company, reported first-quarter revenue of $17.7 billion, exceeding analysts’ estimates of $17.12 billion, according to LSEG data. The strong quarterly performance was driven by broad-based revenue growth across markets and industry groups. The operating margin stood at 16.7%, reflecting a year-on-year increase of 90 basis points and a sequential rise of 167 basis points. Revising its outlook, Accenture now projects full-year revenue growth in the range of 4% to 7%, up from its earlier estimate of 3% to 6%.
No changes
China held its benchmark lending rates steady on Friday as Beijing balances the need to support economic growth with stabilizing a weakening yuan. The People’s Bank of China maintained the one-year loan prime rate (LPR) at 3.1% and the five-year LPR at 3.6%. While the one-year LPR primarily influences corporate and household loans, the five-year LPR serves as a key reference for mortgage rates. The decision aligned with expectations, as indicated by a Reuters poll of 27 economists.
Taking a dive
Micron shares plunged 16% overnight, marking their worst day since March 2020, following the release of disappointing second-quarter guidance in its earnings report. For the fiscal second quarter, Micron projected revenue of $7.9 billion, plus or minus $200 million, and adjusted earnings per share (EPS) of $1.43, plus or minus 10 cents, falling short of analysts’ expectations of $8.98 billion in revenue and $1.91 EPS, according to LSEG.
On the earnings call, CEO Sanjay Mehrotra attributed the weak outlook to slower growth in parts of consumer devices and ongoing “inventory adjustments” impacting the company's performance.
Resistance
Amazon workers at seven facilities in New York, Georgia, California, and Illinois went on strike, demanding better benefits, higher wages, and safer working conditions. The strike, organised by members of the Teamsters union, aims to pressure Amazon to engage in contract negotiations and avoid disruptions during the critical holiday shopping season. The union had previously set a deadline of Sunday for Amazon to agree to bargaining dates. Back on the shelves
The Food and Drug Administration (FDA) announced that the active ingredient in Eli Lilly’s weight loss drug Zepbound, tirzepatide, is no longer in shortage. This decision will eventually prevent compounding pharmacies from producing cheaper, unbranded versions of the injection. The FDA stated in a letter that the shortage of tirzepatide injection products, which began in December 2022, has been resolved, though the agency will continue to monitor supply and demand for the products.
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