AECOM Technology Corporation
) reported earnings of 37 cents per share for first-quarter
fiscal 2014 (ended Dec 31, 2013), beating the Zacks Consensus
Estimate of 36 cents by a penny. The company reported net income
of $56 million which was a significant improvement from last
year's figure of $38 million.
Growth in the company's core business as well as its joint
ventures drove the earnings up. The AECOM Arabia joint venture
performed impressively well in the quarter after the company
gained its control, having received the required consolidation.
In addition, AECOM made significant amount of share repurchases
in the quarter.
AECOM reported total revenue of $1953.9 million, down 3.1%
year over year. The revenues were primarily impacted by the
dismal performance of the Management Support Services segment.
However, the increased demand for the company's construction
services business partially offset the decline. The company's
performance remained positive overall, with new orders
aggregating $3.7 billion in the quarter, including orders from
the Management Support Services segment. Revenues also fell short
of the Zacks Consensus Estimate of $1,997 million.
Professional Technical Services (PTS)
revenues in the quarter were $1.8 billion, marginally down 0.1%
on year-over-year basis. The net service revenue (NSR) also
decreased 4.8% to $1.0 billion due to decreased NSR demands from
Americas and Australia despite gains from Europe and emerging
nations like the Middle East and Asia. The segment's construction
services performed well in the quarter.
Management Support Services (MSS)
reported revenues of $184 million, which declined 25.3% year over
year. The decline was due to the project repositioning initiative
taken by the company to shift focus from lower-margin projects to
Income and Expenses
The company's operating income was $90.0 million in the
quarter compared to $62.0 million in the previous quarter. The
company's gross margin increased to 4.0% from 3.9% in the
The company's general and administration expense was $23.9
million versus $22.1 million in the last quarter.
Balance Sheet and Cash Flow
Cash and cash equivalents were $681.7 million at the
quarter-end, compared with $600.7 million at the end of Sep 30,
2013. AECOM's total debt increased to $1,204 million at the end
of fiscal 2013 compared with $1,173 million on Sep 30, 2013. The
company reported total equity of $2,036 million, compared with
$2,021 million, at the end of last quarter.
Cash flow from operating activities was $137 million. Free
cash flow for the quarter was $117 million including capital
expenditures of $21 million.
AECOM repurchased 0.8million shares for $24.8 million in the
first quarter. At the end of the quarter, the company had share
repurchase authorization worth $340 million.
For fiscal 2014, AECOM has increased its guidance for earnings
to be in the range of $2.50-$2.60 per share, compared with the
previously announced guidance of $2.35-$2.45 per share. The
guidance has benefited from the strengthening dollar and includes
some non-recurring items.
AECOM reaffirmed its earlier guidance for cumulative free cash
flow from fiscal 2013 to fiscal 2017 to be in the range of $1.3
billion to $1.8 billion.
Other Stocks to Consider
AECOM currently holds a Zacks Rank #2 (Buy). Other stocks
worth considering include
Altra Industrial Motion Corp.
Quanta Services, Inc.
), both carrying a Zacks Rank #2 (Buy).
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