AECOM reported impressive first-quarter fiscal 2015 results,
including adjusted earnings that significantly exceeded the Zacks
Consensus Estimate and year-ago quarter figure. This solid
performance stemmed from significant contract wins, an improved
operating performance and the ongoing successful integration of URS
Corp. Going forward, URS' knowledge in sectors like construction,
oil & gas, power and government services will likely be a
significant growth driver for AECOM. However, rising debt levels
stemming from acquisitions remain a matter of concern for the
company. Hence, our Neutral recommendation on the stock remains in
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 at extending 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 serves both private and institutional clients along
with government entities.
In Oct 2014, AECOM closed the acquisition of San Francisco-based
URS Corp. for about $4 billion. The deal's total enterprise value
was around $6 billion. This acquisition has made AECOM one of the
largest companies, in terms of revenues, in the engineering and
construction industry. Post integration, the company intends to
accelerate its strategy of offering an integrated-delivery model,
by adding key capabilities and expertise in vital markets. Going
forward, URS knowledge in sectors like construction, oil & gas,
power and government services will likely be a significant growth
driver for AECOM.
AECOM's businesses have been classified into two distinct
segments: Professional Technical Services (PTS) and Management
Support Services (MSS).
Professional Technical Services (PTS): (contributed 92.2% of the
total revenue in fiscal 2014) 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
Management Support Services (MSS): (7.8%) The MSS segment
specializes in 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 primarily provides services to
various federal agencies.
AECOM Technology Corporation (ACM): Read the Full
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