Friday’s declines added to those from the previous few days, making for a tough week for the stock market. The Dow Jones Industrial Average (DJI -0.85%), S&P 500 (GSPC -1.11%), and Nasdaq Composite (IXIC -0.97%) all ended the session down by approximately 1% as investors’ concerns about a potential recession persisted.
Not only were Accenture (ACN -5.92 percent) and Ford Motor Company (F -6.98 percent) the only stocks to fall on Friday, but each of them had a story to tell that shareholders didn’t seem to want to hear. As the week came to a close on Wall Street, you’ll find out more about the global automaker and consulting giant, as well as the reasons behind their attention.
A slowdown at Accenture is possible.
On Friday, shares of Accenture fell by 6%. Although the consulting firm’s fiscal first-quarter results were generally positive, the outlook for the company’s near future disappointed shareholders.
Accenture’s key metrics experienced solid growth during the quarter that ended on November 30. Despite 10 percentage points of negative effects caused by the strong U.S. dollar, revenue increased 5% year-over-year to $15.7 billion. While its growth rates in financial services and communications, media, and technology were more muted, sales were particularly strong in its health and public service and resources industry groups. Earnings of $3.08 per share were 11% higher than the previous year, and the company’s operating margin increased from the previous year’s levels.
The issue, on the other hand, is that Accenture’s growth in fiscal 2023 is likely to be largely hampered by weakness in the foreign currency. The stronger dollar will have a 5-percentage-point effect on expected growth of 6 to 10 percent for the fiscal second quarter. When reported in U.S. dollars, full-year growth of 8 to 11 percent in local currency can also anticipate a 5 percentage point decrease.
Investors’ confidence in Accenture’s long-term prospects
was not bolstered by management’s revision to its full-year earnings guidance or its 15% quarterly dividend increase to $1.12 per share. That reflects exactly how much trepidation there is about corporate profit heading into 2023.
In the meantime, Ford Motor shares closed Friday’s trading session down 7%. Ford demonstrates its pricing power once more. The automaker capitalized on the popularity of its brand and the high demand for electric vehicles, but investors appear dissatisfied with the approach it is taking.
Ford announced an increase in the price of its brand-new electric full-size pickup truck, the F-150 Lightning. Various reports seemed to be looking at slightly different EV pickup models and different tools for figuring out prices, but several said that the cheapest model would cost nearly $56,000 more—an increase of more than $4,000.
The automaker attempted to justify the move by pointing to the higher prices of the materials it uses. However, this was the third price increase for the F-150 Lightning this year, and it comes at a time when consumer economic prospects are becoming increasingly unsettling. Ford is at risk of losing many potential customers to buyers who will now be unable to afford the vehicles because consumers are already having trouble finding cash for discretionary purchases and financing costs are rising along with interest rates, according to shareholders.
Although there has been a lot of demand for electric vehicles, buyers will eventually run out of money due to rising costs. Sadly, we may not be able to determine whether Ford’s actions have been detrimental until its subsequent quarterly results.
