Shares of Aecom (ACM) rose 3.9% in extended trading Monday after the infrastructure services company reported quarterly results that topped Wall Street expectations and lifted its full-year guidance.
Aecom (ACM) posted revenue of $3.83 billion for its fiscal first quarter, exceeding the consensus estimate of $3.53 billion. Adjusted earnings came in at $1.29 a share, above expectations for $1.16 a share.
Net income fell to $140 million, or $1.06 a share, from $177 million, or $1.33 a share, a year earlier.
Operating income declined 7% to $222 million, while revenue fell 5% year over year, largely reflecting lower pass-through revenue. Net service revenue increased 5% on an adjusted basis, supported by growth in the Americas segment.
Margins improve as backlog expands
Adjusted operating margin rose to 16.4%, an increase of 100 basis points from the prior year. Earnings before interest, taxes, depreciation and amortization rose 6% to $287 million, with margin expansion driven by productivity gains and higher-value work.
Aecom (ACM) reported total backlog of $26.0 billion, up 9% from a year earlier and a record for the company. The quarter produced a book-to-burn ratio of 1.5x, marking the 21st consecutive quarter above 1.0.
“We outperformed our expectations on every key financial metric in the quarter and raised our full year guidance as a result,” said Chairman and Chief Executive Troy Rudd in a statement.
Construction management business retained
Aecom (ACM) said it completed its review of strategic alternatives for its Construction Management business and decided to retain and operate the unit. Results continue to reflect the segment as a continuing operation.
The company returned more than $340 million to shareholders through share repurchases and dividends during the quarter. After the quarter ended, the board approved an increase to the company’s share repurchase authorization to $1 billion.
Guidance raised for fiscal 2026
Aecom (ACM) raised its fiscal 2026 outlook, citing strong execution in its design business, a lower expected tax rate and improved visibility from its growing backlog.
The company now expects adjusted earnings of $5.85 to $6.05 a share, up from a prior range of $5.65 to $5.85. It also forecasts earnings before interest, taxes, depreciation and amortization of $1.27 billion to $1.31 billion, compared with its prior outlook of $1.27 billion to $1.31 billion.
Free cash flow is expected to be about $400 million for the year, with organic net service revenue growth projected at 6% to 8%.