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Why Is Aecom (ACM) Up 5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Aecom Technology (ACM - Free Report) . Shares have added about 5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Aecom due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for AECOM before we dive into how investors and analysts have reacted as of late.
AECOM Beats on Q3 Earnings, Raises FY25 Profit View
AECOM reported mixed third-quarter of fiscal 2025 results, with earnings topping the Zacks Consensus Estimate and revenues missing the same. Year over year, both metrics grew thanks to organic growth in the Americas and International segments.
ACM’s Quarterly Performance
The company reported adjusted earnings per share of $1.34, surpassing the Zacks Consensus Estimate of $1.25 by 7.2% and improving 16% year over year from $1.16.
Revenue of $4.18 billion grew 1% year over year to $4.18 billion. Net service revenue (NSR) of $1.94 billion missed the consensus mark of $1.95 billion but increased 6% year over year.
Margins and Profitability Soar
Adjusted operating income rose 13% to $296 million, with adjusted operating margin expanding 90 basis points (bps) to 17.1%.
Adjusted EBITDA reached $313 million, up 10% from the prior year. Adjusted EBITDA margin of 17.6% grew 110 bps year over year, a record for the company.
Segment Highlights
Americas Segment: NSR rose 8%, with adjusted operating margin expanding 120 basis points to a quarterly record of 20.5%. Backlog reached an all-time high, supported by strong public infrastructure investment and consistent win rates.
International Segment: NSR increased 3%, with adjusted operating margin expanding 20 basis points to 11.9%, driven by strong execution in the UK and Middle East, partially offset by a decline in Australia.
Balance Sheet and Capital Allocation
AECOM ended the quarter with net leverage of 0.6x and no debt maturities until 2029. Year-to-date free cash flow rose 27% to $551 million, including $262 million in Q3.
The company returned $240 million to shareholders year-to-date through repurchases and dividends. The total capital return since program inception (Sept. 2020) stands at $2.7 billion.
Raised Fiscal 2025 Outlook
The company still anticipates generating 5-8% organic NSR growth in fiscal 2025. It now expects adjusted EPS in the range of $5.20-$5.30 (from $5.10-$5.20), indicating a 16% improvement from fiscal 2024 levels on a constant-currency basis, considering the mid-point of the guidance.
AECOM now expects adjusted EBITDA in the range of $1.19-$1.21 billion (from $1.18-$1.21 billion). This indicates 10% year-over-year growth at the midpoint. Adjusted EBITDA margin is expected to be in the range of 16.5% and 16.7% (from 16.1-16.3%).
The company anticipates more than 100% adjusted net income to free cash flow conversion, an average fully diluted share count of 133 million, and an effective tax rate of 24%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, Aecom has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Aecom has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Aecom belongs to the Zacks Engineering - R and D Services industry. Another stock from the same industry, Fluor (FLR - Free Report) , has gained 1.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.
Fluor reported revenues of $3.98 billion in the last reported quarter, representing a year-over-year change of -5.9%. EPS of $0.43 for the same period compares with $0.85 a year ago.
Fluor is expected to post earnings of $0.44 per share for the current quarter, representing a year-over-year change of -13.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -30.7%.
Fluor has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is Aecom (ACM) Up 5% Since Last Earnings Report?
A month has gone by since the last earnings report for Aecom Technology (ACM - Free Report) . Shares have added about 5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Aecom due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for AECOM before we dive into how investors and analysts have reacted as of late.
AECOM Beats on Q3 Earnings, Raises FY25 Profit View
AECOM reported mixed third-quarter of fiscal 2025 results, with earnings topping the Zacks Consensus Estimate and revenues missing the same. Year over year, both metrics grew thanks to organic growth in the Americas and International segments.
ACM’s Quarterly Performance
The company reported adjusted earnings per share of $1.34, surpassing the Zacks Consensus Estimate of $1.25 by 7.2% and improving 16% year over year from $1.16.
Revenue of $4.18 billion grew 1% year over year to $4.18 billion. Net service revenue (NSR) of $1.94 billion missed the consensus mark of $1.95 billion but increased 6% year over year.
Margins and Profitability Soar
Adjusted operating income rose 13% to $296 million, with adjusted operating margin expanding 90 basis points (bps) to 17.1%.
Adjusted EBITDA reached $313 million, up 10% from the prior year. Adjusted EBITDA margin of 17.6% grew 110 bps year over year, a record for the company.
Segment Highlights
Americas Segment: NSR rose 8%, with adjusted operating margin expanding 120 basis points to a quarterly record of 20.5%. Backlog reached an all-time high, supported by strong public infrastructure investment and consistent win rates.
International Segment: NSR increased 3%, with adjusted operating margin expanding 20 basis points to 11.9%, driven by strong execution in the UK and Middle East, partially offset by a decline in Australia.
Balance Sheet and Capital Allocation
AECOM ended the quarter with net leverage of 0.6x and no debt maturities until 2029. Year-to-date free cash flow rose 27% to $551 million, including $262 million in Q3.
The company returned $240 million to shareholders year-to-date through repurchases and dividends. The total capital return since program inception (Sept. 2020) stands at $2.7 billion.
Raised Fiscal 2025 Outlook
The company still anticipates generating 5-8% organic NSR growth in fiscal 2025. It now expects adjusted EPS in the range of $5.20-$5.30 (from $5.10-$5.20), indicating a 16% improvement from fiscal 2024 levels on a constant-currency basis, considering the mid-point of the guidance.
AECOM now expects adjusted EBITDA in the range of $1.19-$1.21 billion (from $1.18-$1.21 billion). This indicates 10% year-over-year growth at the midpoint. Adjusted EBITDA margin is expected to be in the range of 16.5% and 16.7% (from 16.1-16.3%).
The company anticipates more than 100% adjusted net income to free cash flow conversion, an average fully diluted share count of 133 million, and an effective tax rate of 24%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, Aecom has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Aecom has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Aecom belongs to the Zacks Engineering - R and D Services industry. Another stock from the same industry, Fluor (FLR - Free Report) , has gained 1.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.
Fluor reported revenues of $3.98 billion in the last reported quarter, representing a year-over-year change of -5.9%. EPS of $0.43 for the same period compares with $0.85 a year ago.
Fluor is expected to post earnings of $0.44 per share for the current quarter, representing a year-over-year change of -13.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -30.7%.
Fluor has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.