Technology Stocks

Aecom (NYSE:ACM) Beats on EPS with In-Line Revs and a Weak Guide

Aecom (NYSE:ACM) just announced Q4 (Sep) revenue of $5.3 billion and full year revenue of $20.2 billion. Net income and diluted earnings per share were $84 million and $0.52 in the fourth quarter, respectively. Net income and diluted earnings per share were $136 million and $0.84 for the full year. On an adjusted basis, diluted earnings per share1 was $0.83 for the fourth quarter and $2.68 for the full year.

According to the release, organic revenue increased by 9% in the fourth quarter and by 8% in the full year, resulting in record full year revenue of $20.2 billion. Total backlog increased by 14%3 year-over-year to a new all-time high of $54.1 billion. Wins for the year increased by 23% to a record $28.4 billion, including wins of over $6 billion in all four quarters, and momentum has continued in the first quarter with more than $7 billion of large MS and CS wins in October. And fourth quarter free cash flow2 of $511 million was a quarterly record, which drove full year free cash flow of $688 million and resulted in a fourth consecutive year of free cash flow over $600 million.

Aecom (NYSE:ACM) trumpets itself as a company that, together with its subsidiaries, engages in designing, building, financing, and operating infrastructure assets worldwide.

The company operates through four segments: Design and Consulting Services (DCS), Construction Services (CS), Management Services (MS), and AECOM Capital (ACAP). The DCS segment provides planning, consulting, architectural and engineering design, program management, and construction management services for industrial, commercial, institutional, and government clients, such as transportation, facilities, environmental, and energy/power markets.

The CS segment offers building construction and energy, as well as infrastructure and industrial construction services. The MS segment provides program and facilities management and maintenance, training, logistics, consulting, technical assistance, and systems integration and information technology services primarily for agencies of the U.S. government and other national governments.

The ACAP segment invests in and develops real estate, public-private partnership (P3), and infrastructure projects. AECOM has a strategic alliance with Arrow Electronics, Inc. The company was formerly known as AECOM Technology Corporation and changed its name to AECOM in January 2015. AECOM was founded in 1980 and is headquartered in Los Angeles, California.


A Healthy Check-Up, But Could be a Bumpy Ride

As noted above, ACM recently announced its Q4 earnings.

It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things.

“Our fourth quarter and full year 2018 results include new records for revenue, backlog, wins and free cash flow, demonstrating the strength of our industry-leading franchises and setting a strong foundation for continued growth,” said Michael S. Burke, AECOM’s chairman and chief executive officer. “We are proud of these many accomplishments. However, our adjusted EBITDA for the fourth quarter and full year was below our expectations due to the timing of AECOM Capital asset sales, which we now expect in 2019, and execution challenges on a handful of projects in the Construction Services segment. Importantly, we are taking strategic actions from a position of strength that we expect will substantially improve our profitability and position us to fully capitalize on our record $54 billion backlog, which is reflected in our guidance for 12% adjusted EBITDA growth in fiscal 2019.”

Aecom (NYSE:ACM) generated sales of $5.1B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 7.5% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($801.4M against $5.9B, respectively).

Leave a Comment

Your email address will not be published.