AECOM's New Contract

AECOM Technology Corp. (ACM - Snapshot Report) recently announced that one of its joint ventures won a contract related to the redevelopment and expansion of the King Khaled International Airport (KKIA) in Riyadh, Saudi Arabia. The 5-year expansion project, worth $72 million, is primarily to meet the future capacity of 30 million passengers annually.

AECOM's key responsibility areas will include program support as well as project and construction management services. The contract also entails administration, project planning, design management, construction management, information and data management. In addition, public relations and communications, financial management, contract management, operational readiness and airport transfer coordination services are also expected to be performed.

The KKIA passenger terminals are expected to be designed in way that can handle an increase in capacity. To enable this, AECOM will be providing a new processing facility; new domestic, international and swing-capability concourse; renovations for the existing terminals.

Further, AECOM also intends to supply and offer some temporary services which will help it to maintain a high level of service during the construction stages. The temporary services will also aid in upgrading and expanding the main load center with the related utility connections.

The airport expansion project is a part of the program led by the country’s General Authority of Civil Aviation to upgrade KKIA into a modern commercial airport which is specially designed to meet the industry-leading standards.

AECOM’s Professional Technical Services (PTS) segment delivers planning, consulting, architectural and engineering design, and program and construction management services. Before this airport expansion project, the company has also been engaged in providing program management services through a joint venture for the Second Avenue subway line in New York City, design and contract administration services for the Hong Kong-Zhuhai-Macao Bridge's Hong Kong Boundary Crossing Facilities and engineering and environmental management services to support global energy infrastructure development for a number of large petroleum and mining companies. The PTS segment contributed $7.3 billion, or 89%, of the total revenue in 2012.

AECOM currently carries a Zacks Rank #2 (Buy). Some of its peers such as Jacobs Engineering Group Inc. (JEC - Analyst Report), Chicago Bridge & Iron (CBI - Analyst Report) also carry a Zacks Rank #2 (Buy). While Orion Marine Group Inc. (ORN - Snapshot Report) another player in the same industry is doing well with a Zacks Rank #1 (Strong Buy).