We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
AECOM Q4 Earnings Beat Estimates, Up Y/Y, Raises Dividend by 18%
Read MoreHide Full Article
AECOM (ACM - Free Report) reported impressive results for fourth-quarter fiscal 2024, where earnings surpassed the Zacks Consensus Estimate and grew on a year-over-year basis. Revenues also increased from the prior year, backed by solid organic net service revenues (NSR) growth in its design business.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Shares of this global infrastructure leader lost 1.2% in the after-hours trading session on Monday despite being exceeding its previously-increased guidance for all major metrics.
Apart from this, ACM announced an 18% increase in its quarterly dividend payout to 26 cents, payable on Jan. 17, 2025, to stockholders of record on Jan. 2. Also, it increased its share repurchase authorization to $1 billion. Impressively, AECOM has grown per share dividend at a 20% CAGR since inception.
Delving Deeper
The company reported adjusted earnings per share (EPS) of $1.27, which topped the consensus mark of $1.22 by 4.1% and increased 25.7% from $1.01 reported in the prior-year quarter. The strong improvement was backed by benefits received from high-returning organic growth initiatives.
Revenues of $4.11 billion rose 7% on a year-over-year basis. Adjusted NSR moved up 5% to $1.81 billion.
Segment Details
Americas’ revenues came in at $3.16 billion during the reported quarter, up 8% from the prior-year quarter’s levels. NSR of $1.06 billion moved up 6% year over year, backed by 8% growth in the design business, partially offset by impacts from Hurricane Helene in September.
Adjusted operating income of $207.7 million was up 9% year over year. Adjusted operating margin (on an NSR basis) expanded 70 basis points (bps) year over year to 19.6%, indicating the underlying strength of the business, positive impacts of growth and ongoing reinvestment in long-term organic growth initiatives, as well as strong execution and growth.
The total backlog at the fiscal 2024-end was $17.4 billion compared with $16.9 billion a year ago.
International revenues were up 5% year over year to $948.4 million. During the quarter, NSR increased 4% year over year to $754.1 million.
Adjusted operating income in the segment rose 31% year over year to $94.9 million. Adjusted operating margin (on an NSR basis) also moved up 260 bps year over year to 12.6%. This was backed by continued strong execution and the benefits of actions to narrow its focus on high-returning opportunities across its largest geographies.
The total backlog at the end of fiscal 2024 was $6.43 billion compared with $6.27 billion a year ago.
AECOM Capital's quarterly revenues were $0.5 million.
Operating Highlights
Adjusted segment operating profit amounted to $261 million, up 16% from the year-ago quarter. The segment’s adjusted operating margin (NSR) improved 150 bps to 16.7%. The upside was driven by high-returning organic growth.
Adjusted EBITDA rose 15% year over year to $290 million. Adjusted EBITDA margin of 16.7% also rose 140 bps year over year, backed by its ongoing investments in high-margin organic growth and its continuous improvement initiatives.
Backlogs
As of the fiscal 2024-end, the total backlog came in at $23.86 billion compared with $23.16 billion reported in the prior-year period. The current backlog level includes 50.8% contracted backlog growth.
A 5% increase in the design business backlog was driven by a 50%-win rate, an all-time high, and continued strong end-market trends.
ACM’s pipeline of opportunities increased 10%, which was a new high, driven by robust funding across all its largest markets.
ACM’s Fiscal 2024 Highlights
For the full year, the company reported revenues of $16.1 billion, which increased 12% from the previous year. NSR reached an all-time high in fiscal 2024 and included strength across the largest end markets and geographies. ACM delivered 8% growth in the design business in fiscal 2024, driven by 9% growth in the Americas.
Adjusted EPS also increased 22% to $4.52 from fiscal 2023. Adjusted EBITDA margins of 16% also rose 100 bps year over year. The segment adjusted operating margin was 15.8%, which exceeded the guidance of 15.6% and grew 100 bps year over year.
Liquidity & Cash Flow
At the fiscal 2024-end, AECOM’s cash and cash equivalents totaled $1.58 billion compared with $1.26 billion at the fiscal 2023-end. The total debt (excluding unamortized debt issuance costs) as of Sept. 30, 2024, was $2.54 billion, up from $2.22 billion in the fiscal 2023-end.
In fiscal 2024, adjusted operating cash flow increased 19% year over year to $827 million. Adjusted free cash flow also increased 20% to $708 million year over year.
Fiscal 2025 Guidance
The company anticipates to generate 5-8% organic NSR growth in fiscal 2025. It expects adjusted EPS in the range of $5.00-$5.20. This indicates a 13% improvement from fiscal 2024 levels on a constant-currency basis, considering the mid-point of the guidance.
AECOM expects adjusted EBITDA in the range of $1.17-$1.21 billion, indicating 9% year-over-year growth at the midpoint. Adjusted EBITDA margin is expected to be 16.3%, representing a 30 bps increase from fiscal 2024.
The company anticipates more than 100% adjusted net income to free cash flow conversion, an average fully diluted share count of 134 million and an effective tax rate of 24%.
Long-Term Views
ACM expects to deliver 5-8% organic NSR growth, at least 20-30 bps adjusted EBITDA margin expansion, double-digit adjusted EPS and free cash flow per share improvement annually. It also expects to achieve at least 17% adjusted EBITDA margin (exiting fiscal 2026) and at least 25% return on invested capital over the long term. ACM anticipates approximately 100% conversion of adjusted net income to free cash flow.
Fluor Corporation (FLR - Free Report) reported third-quarter 2024 adjusted EPS of 51 cents, which missed the Zacks Consensus Estimate of 78 cents by 34.6%. The reported figure decreased 50% from an EPS of $1.02 a year ago.
Fluor’s quarterly revenues of $4.09 billion missed the consensus mark of $4.79 billion by 14.6%. The figure grew 3.3% from the year-ago quarter’s level of $3.96 billion.
KBR, Inc. (KBR - Free Report) reported mixed third-quarter fiscal 2024 results, with adjusted earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
KBR’s quarterly results were backed by the benefits realized from the LinQuest acquisition and solid contributions from both the reportable businesses, given the increased demand trends for its services. Although high costs and expenses were headwinds, leverage from the increased top line aided the uptick.
Quanta Services Inc. (PWR - Free Report) reported mixed results for the third quarter of 2024, wherein adjusted earnings beat the Zacks Consensus Estimate, but revenues missed the same.
Quanta reported a strong quarter with double-digit growth across key financial metrics, a record backlog of $34 billion and $539.5 million in free cash flow. CEO Duke Austin attributed this growth to Quanta’s diverse portfolio, high demand, effective execution and an expanding market.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
AECOM Q4 Earnings Beat Estimates, Up Y/Y, Raises Dividend by 18%
AECOM (ACM - Free Report) reported impressive results for fourth-quarter fiscal 2024, where earnings surpassed the Zacks Consensus Estimate and grew on a year-over-year basis. Revenues also increased from the prior year, backed by solid organic net service revenues (NSR) growth in its design business.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Shares of this global infrastructure leader lost 1.2% in the after-hours trading session on Monday despite being exceeding its previously-increased guidance for all major metrics.
Apart from this, ACM announced an 18% increase in its quarterly dividend payout to 26 cents, payable on Jan. 17, 2025, to stockholders of record on Jan. 2. Also, it increased its share repurchase authorization to $1 billion. Impressively, AECOM has grown per share dividend at a 20% CAGR since inception.
Delving Deeper
The company reported adjusted earnings per share (EPS) of $1.27, which topped the consensus mark of $1.22 by 4.1% and increased 25.7% from $1.01 reported in the prior-year quarter. The strong improvement was backed by benefits received from high-returning organic growth initiatives.
AECOM Price, Consensus and EPS Surprise
AECOM price-consensus-eps-surprise-chart | AECOM Quote
Revenues of $4.11 billion rose 7% on a year-over-year basis. Adjusted NSR moved up 5% to $1.81 billion.
Segment Details
Americas’ revenues came in at $3.16 billion during the reported quarter, up 8% from the prior-year quarter’s levels. NSR of $1.06 billion moved up 6% year over year, backed by 8% growth in the design business, partially offset by impacts from Hurricane Helene in September.
Adjusted operating income of $207.7 million was up 9% year over year. Adjusted operating margin (on an NSR basis) expanded 70 basis points (bps) year over year to 19.6%, indicating the underlying strength of the business, positive impacts of growth and ongoing reinvestment in long-term organic growth initiatives, as well as strong execution and growth.
The total backlog at the fiscal 2024-end was $17.4 billion compared with $16.9 billion a year ago.
International revenues were up 5% year over year to $948.4 million. During the quarter, NSR increased 4% year over year to $754.1 million.
Adjusted operating income in the segment rose 31% year over year to $94.9 million. Adjusted operating margin (on an NSR basis) also moved up 260 bps year over year to 12.6%. This was backed by continued strong execution and the benefits of actions to narrow its focus on high-returning opportunities across its largest geographies.
The total backlog at the end of fiscal 2024 was $6.43 billion compared with $6.27 billion a year ago.
AECOM Capital's quarterly revenues were $0.5 million.
Operating Highlights
Adjusted segment operating profit amounted to $261 million, up 16% from the year-ago quarter. The segment’s adjusted operating margin (NSR) improved 150 bps to 16.7%. The upside was driven by high-returning organic growth.
Adjusted EBITDA rose 15% year over year to $290 million. Adjusted EBITDA margin of 16.7% also rose 140 bps year over year, backed by its ongoing investments in high-margin organic growth and its continuous improvement initiatives.
Backlogs
As of the fiscal 2024-end, the total backlog came in at $23.86 billion compared with $23.16 billion reported in the prior-year period. The current backlog level includes 50.8% contracted backlog growth.
A 5% increase in the design business backlog was driven by a 50%-win rate, an all-time high, and continued strong end-market trends.
ACM’s pipeline of opportunities increased 10%, which was a new high, driven by robust funding across all its largest markets.
ACM’s Fiscal 2024 Highlights
For the full year, the company reported revenues of $16.1 billion, which increased 12% from the previous year. NSR reached an all-time high in fiscal 2024 and included strength across the largest end markets and geographies. ACM delivered 8% growth in the design business in fiscal 2024, driven by 9% growth in the Americas.
Adjusted EPS also increased 22% to $4.52 from fiscal 2023. Adjusted EBITDA margins of 16% also rose 100 bps year over year. The segment adjusted operating margin was 15.8%, which exceeded the guidance of 15.6% and grew 100 bps year over year.
Liquidity & Cash Flow
At the fiscal 2024-end, AECOM’s cash and cash equivalents totaled $1.58 billion compared with $1.26 billion at the fiscal 2023-end. The total debt (excluding unamortized debt issuance costs) as of Sept. 30, 2024, was $2.54 billion, up from $2.22 billion in the fiscal 2023-end.
In fiscal 2024, adjusted operating cash flow increased 19% year over year to $827 million. Adjusted free cash flow also increased 20% to $708 million year over year.
Fiscal 2025 Guidance
The company anticipates to generate 5-8% organic NSR growth in fiscal 2025. It expects adjusted EPS in the range of $5.00-$5.20. This indicates a 13% improvement from fiscal 2024 levels on a constant-currency basis, considering the mid-point of the guidance.
AECOM expects adjusted EBITDA in the range of $1.17-$1.21 billion, indicating 9% year-over-year growth at the midpoint. Adjusted EBITDA margin is expected to be 16.3%, representing a 30 bps increase from fiscal 2024.
The company anticipates more than 100% adjusted net income to free cash flow conversion, an average fully diluted share count of 134 million and an effective tax rate of 24%.
Long-Term Views
ACM expects to deliver 5-8% organic NSR growth, at least 20-30 bps adjusted EBITDA margin expansion, double-digit adjusted EPS and free cash flow per share improvement annually. It also expects to achieve at least 17% adjusted EBITDA margin (exiting fiscal 2026) and at least 25% return on invested capital over the long term. ACM anticipates approximately 100% conversion of adjusted net income to free cash flow.
Zacks Rank & Peer Releases
AECOM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fluor Corporation (FLR - Free Report) reported third-quarter 2024 adjusted EPS of 51 cents, which missed the Zacks Consensus Estimate of 78 cents by 34.6%. The reported figure decreased 50% from an EPS of $1.02 a year ago.
Fluor’s quarterly revenues of $4.09 billion missed the consensus mark of $4.79 billion by 14.6%. The figure grew 3.3% from the year-ago quarter’s level of $3.96 billion.
KBR, Inc. (KBR - Free Report) reported mixed third-quarter fiscal 2024 results, with adjusted earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
KBR’s quarterly results were backed by the benefits realized from the LinQuest acquisition and solid contributions from both the reportable businesses, given the increased demand trends for its services. Although high costs and expenses were headwinds, leverage from the increased top line aided the uptick.
Quanta Services Inc. (PWR - Free Report) reported mixed results for the third quarter of 2024, wherein adjusted earnings beat the Zacks Consensus Estimate, but revenues missed the same.
Quanta reported a strong quarter with double-digit growth across key financial metrics, a record backlog of $34 billion and $539.5 million in free cash flow. CEO Duke Austin attributed this growth to Quanta’s diverse portfolio, high demand, effective execution and an expanding market.