AECOM-Hill, a joint venture led by AECOM (ACM - Free Report) with Hill International, Inc. , has won a $107.4-million contract from the New York City Department of Design and Construction (“DDC”) to develop four new correctional facilities in Manhattan, Brooklyn, Queens and the Bronx.
Per the deal, AECOM-Hill will work as Program Management Consultants for four new borough-based facilities that will enable closure of the Rikers Island Correctional Facility. AECOM-Hill, together with DDC, will assemble and develop program requirements, and manage design-build teams until the completion of this multi-billion capital program.
This first ever design-build state-of-the-art program will make significant improvements for people in detention, their families and employees of the NYC Department of Correction. These correctional facilities will be integrated with health, educational and re-entry programs, along with community space.
The joint venture strengthens this complex program with Hill’s expertise in in-depth risk and project management insight, along with AECOM’s extensive design-build, program management, and correctional sector experience.
Notably, the value of this contract will be included in Design and Consulting Services ("DCS") backlog in third-quarter fiscal 2019.
AECOM has a diversified business that comprises both designing and construction services. The company has been witnessing robust prospects across segments over the last few quarters. In the fiscal second quarter, its backlog increased 22% year over year. New order wins were also up 17% from the prior-year period.
In the DCS segment, the company is currently pursuing a multi-billion-dollar pipeline of opportunities. The solid backlog levels indicate significant growth opportunities in the forthcoming quarters.
Markedly, shares of AECOM have outperformed its industry so far this year. The stock has gained 19.1% compared with its industry’s 14.3% rally in the said period. Estimates for fiscal 2019 have moved up 1.1% in the past 60 days, raising analysts’ optimism surrounding the company’s earnings growth potential.
Zacks Rank & Other Key Picks
Currently, AECOM carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the same space include Altair Engineering Inc. (ALTR - Free Report) and Quanta Services, Inc. (PWR - Free Report) . While Altair sports a Zacks Rank #1 (Strong Buy), Quanta Services carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Altair Engineering and Quanta Services’ earnings for the current year are expected to increase 53.7% and 28.8%, respectively.
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