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.
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
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.
AECOM Technology Corporation (ACM) (ACM): Read the
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