Morning Briefing - May 08, 2019
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May 08, 2019

DOE Contract Extension Boosts AECOM’s 2Q Earnings

By ExchangeMonitor

An 18-month extension for a major Department of Energy contract gave a boost to AECOM’s earnings for the second quarter and first half of its 2019 fiscal year.

The Los Angeles-based infrastructure multinational on Wednesday reported just over $5 billion in revenue for the quarter and $10 billion for the six months through March 31. Those numbers were, respectively, up by 5% and 4% from the prior year.

Net income for the second quarter landed at $78 million, or $0.49 per diluted share, against a loss of nearly $120 million, or $0.75 per share, in the same period of fiscal 2018. In a press release on the earnings, AECOM attributed last year’s loss partially to a $168 million non-cash charge for “non-core” oil and gas resources that were held for sale.

Overall, the company grew its backlog by 22% in the quarter, to $61 billion. It secured $8.1 billion worth of new contracts, including the extension for AECOM-led Savannah River Remediation (SRR), which provides liquid radioactive waste management at DOE’s Savannah River Site in South Carolina. The March extension, worth $750 billion, keeps SRR on the job through Sept. 30, 2020. The other partners in the contractor are Bechtel, CH2M, and BWX Technologies.

AECOM’s Management Services business handles its Energy Department contracts, which also include management of the Waste Isolation Pilot Plant in New Mexico. Management Services reported just over $1 billion in revenue for the quarter, up 14% from $897.8 million on a year-over-year basis. Income from operations grew from $43.4 million to $51.3 million. For the six-month period, Management Services reported just over $2 billion in revenue and $102.4 million in income from operations; the comparable numbers for fiscal 2018 were $1.7 billion in revenue and $83.5 million in income from operations.

AECOM executives will host their quarterly earnings conference call at noon Eastern time today. The event will be webcast.