AECOM Reports Decline in Q1 Earnings

LOS ANGELES—AECOM recently announced its first quarter results for fiscal year 2020 on a call, also addressing several other points of discussion pertaining to the infrastructure firm, including its rumored merger with WSP, the sale of one of its divisions, and more. Find highlights from the call below. 

Q1 2020 Results

• The company’s Q1 revenue was $3.2 billion, with $2.5 billion of that total in the Americas division. The results are a 4% decrease from the previous fiscal year. This is partially attributed to a decrease in disaster recovery in the United States Virgin Islands. 
• The firm had a net income of $31 million. The number is down 40% from the previous year’s results. 
• The firm also announced an adjusted EBITDA between $720 million and $760 million—up 27% over last year. 

In Other News

• The company’s decision to exit 30 countries is almost 50% complete. 
• As of January 31, the sale of AECOM’s Management Services (MS) division to private equity firms is complete. The company plans to use the sale of the MS division to reduce debt in Q2 2020. The division has been rebranded as a company called Amentum. 
• President and chief executive officer Michael S. Burke declined to comment on recent news that the company is talks with engineering firm WSP concerning a potential merger. 
• The leadership team present on the call also declined to comment on the Burke’s replacement as CEO. Burke announced his retirement in late 2019. 

Quotes from the Executive Team

• “The strategic actions we have taken and continue to take to simplify our operating structure and transform into a higher returning and lower-risk professional services business have delivered a substantial increase in shareholder value,” said Michael S. Burke, AECOM’s chairman and CEO. “I am proud of the many successes we have achieved as an organization over the last several years and AECOM is better positioned than ever to continue this momentum into the future.”
• “We delivered exceptional first quarter results highlighted by adjusted EBITDA that exceeded our expectations, which provides us with tremendous confidence in achieving our financial and strategic priorities this year and beyond,” said W. Troy Rudd, AECOM’s chief financial officer. “Our cash flow was mostly consistent with our expectations, adjusted for timing-related 2 impacts in the management services business that were mostly recovered in January. As a result, we reiterated our full year free cash flow guidance, which reflects the highly-cash generative nature of the business. As our strong margin improvements over the past five quarters indicate, we are delivering the benefits of our restructuring actions to the bottom line and are confident in achieving our full year and long-term financial targets.”

To read the full results, click here.