AECOM on Tuesday reported $5 billion in revenue for the quarter ended Dec, 31, about 3 percent more than the $4.9 billion reported in the same period one year earlier.
Net income attributable to AECOM came in at $52 million, down 54 percent from $111 million reported in the same quarter a year ago. The Los Angeles-based engineering and infrastructure multination reported earnings for the three months ended Dec. 31, which is its first quarter for fiscal 2019.
The company reported quarterly earnings per share of $0.33, down 53 percent from the $0.70 recorded for the quarter ended Dec. 31, 2017.
AECOM’s income from operations was $84 million for the quarter, dropping from $131 million a year earlier. The recent partial federal government shutdown slowed cash flow for some company operations, which should be recouped later, executives said. Factors such as the pending U.K. withdrawal from the European Union, and AECOM’s exit from certain less-profitable businesses and countries, also reduced quarterly income.
The Construction Services business, which houses AECOM’s domestic commercial nuclear decontamination and decommissioning services, reported a 5 percent drop in quarterly revenue, to $2 billion. Operating income fell steeply, from $40 million to $11 million. The adjusted figure was down from $51 million to $31 million. Management attributed the reductions to lower building construction business and less revenue from the Power segment,
AECOM’s Management Services (MS) unit, which includes work for the Department of Energy and international decommissioning clients, recorded $989 million in quarterly revenue, rising 17 percent year over year from $843 million. The sector’s operating income was $51 million, up more than 25 percent, from $40 million.
For fiscal 2019, which started Oct. 1, AECOM expects adjusted earnings per share in the $2.60 to $2.90 range.
“Continued overall growth in the DCS [Design and Consulting Services] and MS segments, new records for wins and backlog, and adjusted earnings that surpassed our expectations resulted in a strong start to the year,” AECOM Chairman and CEO Michael Burke said in the earnings release.
AECOM is a partner, with EnergySolutions, in the general contractor for decommissioning of the retired San Onofre Nuclear Generating Station (SONGS) in San Diego County, Calif. SONGS Decommissioning Solutions secured its $1 billion contract in 2016. It is still waiting on authorization from state regulators to begin major decommissioning operations, which are due to be largely completed within a decade.
In a May 2018 earnings call, Burke identified other decommissioning opportunities at the Diablo Canyon nuclear power plant in San Luis Obispo County, Calif., which is due to close in 2025, and for Bruce Power plants in Canada.
Jacobs Revenue Up Company-Wide and in Nuclear Business
Meanwhile, Dallas-based Jacobs Engineering brought in $3.1 billion in revenue during the quarter ended Dec. 31, 73 percent higher than the $1.8 billion reported for the same period one year earlier
The company recorded quarterly net earnings of $124 million and earnings per share of $0.86. The numbers are dramatically increased from $2 million and $0.02 EPS for the first quarter of fiscal 2018. Jacobs also reported operating profit of $113 million during the latest quarter, compared to a $4.6 million loss during the same period a year earlier.
Jacobs’ Aerospace, Technology, Environmental, and Nuclear segment showed an operating profit of $72.1 million for the quarter, up from $61 million on a year-over-year basis. The segment reported revenue of $1 billion, compared to $710 million during the first quarter of fiscal 2018.
The acquisition of CH2M in December 2017 helped the Jacobs nuclear segment’s “focus on high priority federal programs,” according to the company’s earnings slide presentation. The segment has a “robust government services pipeline.” Defense and NASA contracts also bolstered the segment’s performance, as did a nuclear cleanup contract with the U.S. Army Corps of Engineers, said Jacobs Chairman and CEO Steve Demetriou in the earnings call.
After a delay of more than a year, the Army Corps in September authorized Jacobs Field Services North America to begin work on the $350 million project near Pittsburgh under the Formerly Utilized Remedial Action Program (FUSRAP).
“Under this [Shallow Land Disposal Area] contract we’ll handle all aspects from planning through processing of radioactively contaminated soil, sediments and debris,” the CEO said.
Jacobs also does business in the commercial nuclear cleanup sector, including joining Westinghouse and EnergySolutions in providing decommissioning services for a facility at the Sellafield site in the United Kingdom. Late last year, the company picked up work valued at up to $32 million for design and engineering services for decommissioning of the Dounreay fast-reactor site in Scotland.
Company-wide earnings highlights include the anticipated June closure of the sale of its Energy, Chemicals, and Resources business to Australian engineering company WorleyParsons, as well as corporate restructuring connected to the CH2M buyout. WorleyParsons agreed in October to buy the Jacobs ECR business in a transaction valued at $3.3 billion.
Jacobs has nearly completed its integration of CH2M, executives said. The new acquisition has now moved to the Jacobs method for record-keeping and reporting projects in the backlog, company managers said.
After-tax transaction costs stemming from closing of the purchase, and the pending sale of ECR, dropped from $51 million, or $0.41 per diluted share, in the first quarter of fiscal 2018 to $5 million, or $0.03 per diluted share, in the first quarter of 2019.
Once the energy and chemicals business is sold, Jacobs will bring in 79 percent of its revenue from the United States and 21 percent internationally. During fiscal 2018, Jacobs received 36 percent of its revenue from outside the United States, said spokeswoman Lorrie Crum.
