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AECOM (ACM) Gears Up for Q4 Earnings: What's in the Cards?

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AECOM (ACM - Free Report) is scheduled to release fourth-quarter fiscal 2021 results on Nov 15.

In the last reported quarter, the company’s adjusted earnings were in line with the Zacks Consensus Estimate but revenues beat the same. On a year-over-year basis, earnings and revenues grew 33% and 7%, respectively.

AECOM’s earnings topped the consensus mark in three of the last four quarters and met the same on another occasion, with the average surprise being 5.1%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been unchanged at 80 cents over the past 60 days. Nonetheless, this indicates an increase of 33.3% from the year-ago quarter. The consensus estimate for revenues is pegged at $3.33 billion, suggesting a 6.6% year-over-year decline.

AECOM Price and EPS Surprise

AECOM Price and EPS Surprise

AECOM price-eps-surprise | AECOM Quote

Factors to Note

AECOM is expected to have gained from strength across core transportation, water and environment markets in the fiscal fourth quarter. The company’s net service revenues or NSR — defined as revenues excluding subcontractor and other direct costs — have been benefiting from the same, especially in the design business.

Also, its focus on ESG or Environmental, Social and Governance bodes well. The company has been benefiting from the industry-leading position in green building and green design, environmental compliance and remediation, energy efficiency as well as infrastructure resilience. As a result of its ESG priorities, the company will be in a position to advise clients in key transportation, water and environment markets, thereby boosting the backlog level.

AECOM’s actions taken to boost margins, and investments in technology, shared service centers as well as design centers to improve project delivery efficiencies will reflect in the quarterly results.

The company is also expected to have benefited from its broad international exposure. Owing to an improvement in the global economic scenario, the company might have gained from infrastructural activities in international markets.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for AECOM this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Performance of Some Other Engineering – R&D Services Companies

Quanta Services Inc. (PWR - Free Report) reported third-quarter 2021 results, wherein adjusted earnings not only surpassed the Zacks Consensus Estimate by 0.7% but also grew 5.7% on a year-over-year basis. Revenues also improved 10.9% from a year ago but missed the consensus mark by 2.2%.

Quanta currently carries a Zacks Rank #3. The stock has gained 61.9% year to date compared with a 36.6% rise of the Zacks Engineering - R and D Services industry it belongs to.

KBR, Inc. (KBR - Free Report) reported third-quarter 2021 results, wherein earnings and revenues topped the Zacks Consensus Estimate by 12.3% and 18.8%, respectively. The company also raised its full-year view. Earnings and revenues grew 45.5% and 33.6% year over year, respectively. The company benefited from solid Government Solutions organic growth and strong execution across the business.

KBR currently carries a Zacks Rank #3. The stock has gained 44.5% year to date.

Fluor Corporation (FLR - Free Report) reported impressive third-quarter 2021 results, wherein earnings surpassed the Zacks Consensus Estimate by 43.8% but revenues missed the same by 6.3%. The company made significant progress toward strategic goals that comprise the reduction of outstanding debt by 30% and identified ways for more than $150 million in annual cost savings.

Fluor currently carries a Zacks Rank #3. The stock gained 39.3% year to date.


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