AECOM Technology Corporation (ACM) (ACM): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
AECOM is a provider of professional, technical and management support services. We are upgrading our recommendation to Neutral from Underperform with a target price of $33. The company reported strong first-quarter fiscal 2014 results with an increased bottom-line. However, the company's top line declined, owing to the weak performance of the Management Support Services segment. The company increased its earnings outlook for fiscal 2014 and reiterated its cash flow guidance for its five-year plan period. However, declining demand from Australia and the Americas were a drag for the company's business in the quarter, and the situation is likely to continue for the rest of 2014.

Overview:

AECOM Technology Corporation (ACM) is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government as well as those in environmental, energy, and water businesses. AECOM specializes in providing integrated services for planning, construction and maintenance of infrastructures that includes consulting, architecture, engineering as well as managing the requirements for energy, water and environment.

The company's core area of expertise comprises planning and installing critical infrastructure systems by providing high quality commercial services aimed to extend the life of new and existing structures. The company's underlying motto is Create. Enhance. Sustain.'. The operations and maintenance services for these facility environment systems are also provided by the company. AECOM services both private and institutional clients along with government entities.

AECOM has a diverse range of business classified into two distinct segments: Professional Technical Services (PTS) and Management Support Services (MSS).

Professional Technical Services (PTS): (contributed 88.8% of the total revenue in fiscal 2013) The company's PTS segment provides planning, consulting, architecture and engineering design, along with services for managing program and construction for various institutional, commercial and public sector clients across the globe.

Management Support Services (MSS): (11.2%) The MSS segment specializes in providing maintenance services that include management of program and facilities as well as training and logistics services. It also excels in providing other core services including consulting and technical assistance along with services for integrating the systems. The segment majorly provides services to various federal agencies.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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