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AECOM (ACM) Q2 Earnings Miss, Revenues Top, Backlog Up Y/Y
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AECOM (ACM - Free Report) reported mixed results for second-quarter fiscal 2024, wherein earnings missed the Zacks Consensus Estimate but the revenues topped the same.
On a year-over-year basis, the top and bottom lines increased, backed by solid organic growth in net service revenues (NSR) in its reportable segments.
Delving Deeper
The company reported adjusted earnings per share (EPS) of $1.04, which missed the Zacks Consensus Estimate of $1.05 by 1% but increased 13% from 92 cents reported in the prior-year quarter. The strong improvement was backed by benefits from high-returning organic growth initiatives.
Revenues of $3.94 billion remarkably topped the consensus mark of $1.81 billion by 118.4% and grew 13% on a year-over-year basis.
Adjusted NSR moved up 8% year over year to $1.82 billion led by the strengths in water, transportation and environment end markets, with growth trajectory witnessed in the Americas and the International segments.
Segment Details
Americas’ revenues were $3.04 billion, up 16% from the prior-year quarter’s levels. NSR of $1.1 billion moved up 10% year over year driven by solid end-market performances mainly in water, transportation and environment.
Adjusted operating income of $194 million was up 6% year over year. Adjusted operating margin (on an NSR basis) contracted 70 basis points (bps) year over year to 18%.
The total backlog at the fiscal second-quarter end was $17.38 billion compared with $16.89 billion a year ago.
International revenues were up 5% year over year to $905 million. NSR increased 6% year over year to $746 million, suggesting growth across the largest markets.
Adjusted operating income in the segment rose 35% year over year to $82 million. Adjusted operating margin (on an NSR basis) also moved up 240 bps year over year to 10.9%. This reflects the International segment’s growth trajectory as the company executes its continuous margin improvement initiatives.
The total backlog at the end of the quarter was $6.37 billion compared with $6.09 billion from a year ago.
AECOM Capital's quarterly revenues were $0.5 million.
Operating Highlights
Adjusted segment operating profit amounted to $240 million, up 13% from the year-ago quarter’s level. The segment’s adjusted operating margin (NSR) improved 70 bps to 15.1% year over year. The upside was driven by high-returning organic growth.
Adjusted EBITDA also rose 10% year over year to $268 million.
Backlog
As of the fiscal second quarter’s end, the total backlog was $23.74 billion compared with $22.98 billion reported in the prior-year period. The current backlog level includes 54.8% contracted backlog growth.
The design business backlog grew 6.3% to $22.29 billion. The metric was driven by a near-record win rate and continued strong end-market trends.
Liquidity & Cash Flow
At the fiscal second-quarter end, AECOM’s cash and cash equivalents totaled $1.07 billion compared with $1.19 billion at the end of Dec 31, 2023. The total debt (excluding unamortized debt issuance costs) as of Mar 31, 2024, was $2.23 billion, sequentially up from $2.22 billion.
Operating cash flow increased year over year by a whopping 725% $94 million. Free cash flow also increased to $74 million from $20.8 million reported a year ago.
Fiscal 2024 Guidance
The company still anticipates to generate organic NSR growth in the range of 8-10% in fiscal 2024. It expects adjusted EPS in the range of $4.35-$4.55. This indicates a 20% improvement from the fiscal 2023 levels on a constant-currency basis, considering the mid-point of the guidance.
Also, it projects an adjusted operating margin of 15.6%, suggesting a 90 bps increase on a year-over-year basis. AECOM now expects adjusted EBITDA guidance in the range of $1,070-$1,105 million compared with the prior expectation of $1.065-$1.105 million.
The company anticipates more than 100% adjusted net income to free cash flow conversion, an average fully diluted share count of 137 million and an effective tax rate of 24-26%. Also, it projects to deliver a return on invested capital of approximately 20% in fiscal 2024.
MasTec, Inc. (MTZ - Free Report) reported better-than-expected first-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate and increasing year over year.
The company’s results reflect solid contributions from its Oil and Gas segment, which were partially offset by soft contributions from the other reportable segments. The uptick in the Oil and Gas segment was attributable to higher levels of project activity, including project timing-related increases in large-diameter and midstream project activity due to improved market and regulatory conditions.
Quanta Services Inc. (PWR - Free Report) reported better-than-expected first-quarter 2024 results, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.
Quanta's performance marks a strong beginning to the year, characterized by impressive growth across key metrics. Double-digit increases in revenues, adjusted EBITDA and EPS, alongside record cash flow, underscore the company's robust performance. Notably, the Electric Power Infrastructure Solutions segment exceeded expectations, delivering superior profitability attributed to consistent operational excellence and safe execution.
Vulcan Materials Company (VMC - Free Report) reported better-than-expected results for the first quarter of 2024, wherein earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, both metrics decreased due to lower Aggregate shipments.
Strong shipments in Arizona and California attributed to 9.7% year-over-year revenue growth of the company’s Asphalt segment. Cash gross profit per ton improved to $8.86 from $8.03, backed by continued pricing momentum and solid execution despite lower shipments due to unfavorable weather conditions for most of the quarter.
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AECOM (ACM) Q2 Earnings Miss, Revenues Top, Backlog Up Y/Y
AECOM (ACM - Free Report) reported mixed results for second-quarter fiscal 2024, wherein earnings missed the Zacks Consensus Estimate but the revenues topped the same.
On a year-over-year basis, the top and bottom lines increased, backed by solid organic growth in net service revenues (NSR) in its reportable segments.
Delving Deeper
The company reported adjusted earnings per share (EPS) of $1.04, which missed the Zacks Consensus Estimate of $1.05 by 1% but increased 13% from 92 cents reported in the prior-year quarter. The strong improvement was backed by benefits from high-returning organic growth initiatives.
Revenues of $3.94 billion remarkably topped the consensus mark of $1.81 billion by 118.4% and grew 13% on a year-over-year basis.
AECOM Price, Consensus and EPS Surprise
AECOM price-consensus-eps-surprise-chart | AECOM Quote
Adjusted NSR moved up 8% year over year to $1.82 billion led by the strengths in water, transportation and environment end markets, with growth trajectory witnessed in the Americas and the International segments.
Segment Details
Americas’ revenues were $3.04 billion, up 16% from the prior-year quarter’s levels. NSR of $1.1 billion moved up 10% year over year driven by solid end-market performances mainly in water, transportation and environment.
Adjusted operating income of $194 million was up 6% year over year. Adjusted operating margin (on an NSR basis) contracted 70 basis points (bps) year over year to 18%.
The total backlog at the fiscal second-quarter end was $17.38 billion compared with $16.89 billion a year ago.
International revenues were up 5% year over year to $905 million. NSR increased 6% year over year to $746 million, suggesting growth across the largest markets.
Adjusted operating income in the segment rose 35% year over year to $82 million. Adjusted operating margin (on an NSR basis) also moved up 240 bps year over year to 10.9%. This reflects the International segment’s growth trajectory as the company executes its continuous margin improvement initiatives.
The total backlog at the end of the quarter was $6.37 billion compared with $6.09 billion from a year ago.
AECOM Capital's quarterly revenues were $0.5 million.
Operating Highlights
Adjusted segment operating profit amounted to $240 million, up 13% from the year-ago quarter’s level. The segment’s adjusted operating margin (NSR) improved 70 bps to 15.1% year over year. The upside was driven by high-returning organic growth.
Adjusted EBITDA also rose 10% year over year to $268 million.
Backlog
As of the fiscal second quarter’s end, the total backlog was $23.74 billion compared with $22.98 billion reported in the prior-year period. The current backlog level includes 54.8% contracted backlog growth.
The design business backlog grew 6.3% to $22.29 billion. The metric was driven by a near-record win rate and continued strong end-market trends.
Liquidity & Cash Flow
At the fiscal second-quarter end, AECOM’s cash and cash equivalents totaled $1.07 billion compared with $1.19 billion at the end of Dec 31, 2023. The total debt (excluding unamortized debt issuance costs) as of Mar 31, 2024, was $2.23 billion, sequentially up from $2.22 billion.
Operating cash flow increased year over year by a whopping 725% $94 million. Free cash flow also increased to $74 million from $20.8 million reported a year ago.
Fiscal 2024 Guidance
The company still anticipates to generate organic NSR growth in the range of 8-10% in fiscal 2024. It expects adjusted EPS in the range of $4.35-$4.55. This indicates a 20% improvement from the fiscal 2023 levels on a constant-currency basis, considering the mid-point of the guidance.
Also, it projects an adjusted operating margin of 15.6%, suggesting a 90 bps increase on a year-over-year basis. AECOM now expects adjusted EBITDA guidance in the range of $1,070-$1,105 million compared with the prior expectation of $1.065-$1.105 million.
The company anticipates more than 100% adjusted net income to free cash flow conversion, an average fully diluted share count of 137 million and an effective tax rate of 24-26%. Also, it projects to deliver a return on invested capital of approximately 20% in fiscal 2024.
Zacks Rank & Recent Construction 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.
MasTec, Inc. (MTZ - Free Report) reported better-than-expected first-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate and increasing year over year.
The company’s results reflect solid contributions from its Oil and Gas segment, which were partially offset by soft contributions from the other reportable segments. The uptick in the Oil and Gas segment was attributable to higher levels of project activity, including project timing-related increases in large-diameter and midstream project activity due to improved market and regulatory conditions.
Quanta Services Inc. (PWR - Free Report) reported better-than-expected first-quarter 2024 results, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.
Quanta's performance marks a strong beginning to the year, characterized by impressive growth across key metrics. Double-digit increases in revenues, adjusted EBITDA and EPS, alongside record cash flow, underscore the company's robust performance. Notably, the Electric Power Infrastructure Solutions segment exceeded expectations, delivering superior profitability attributed to consistent operational excellence and safe execution.
Vulcan Materials Company (VMC - Free Report) reported better-than-expected results for the first quarter of 2024, wherein earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, both metrics decreased due to lower Aggregate shipments.
Strong shipments in Arizona and California attributed to 9.7% year-over-year revenue growth of the company’s Asphalt segment. Cash gross profit per ton improved to $8.86 from $8.03, backed by continued pricing momentum and solid execution despite lower shipments due to unfavorable weather conditions for most of the quarter.