Companies
Latest AECOM and Jacobs Results Keep Profit Margins Prominent
Earnings reports issued by companies with publicly traded shares. Photo: Zerbor/iStock/Getty Images Plus
AECOM and Jacobs Engineering Group don't play in exactly the same design, consulting and program management sandboxes, but they have both been keeping profit margins prominent in financial reports to investors.
Financial updates for each firm's latest quarter make that clear.
AECOM (NYSE: ACM), which sticks more closely to traditional infrastructure, reported net income Aug. 8 from continuing operations of $107 million for its fiscal third quarter of 2022, and $274 million for the first nine months, compared to $27.9 million and $199.6 million for the same periods in the prior year.
Revenue decreased 5% to $3.2 billion for the quarter, and to $9.7 billion for the nine months of 2022, compared to $3.4 billion and $9.9 billion in 2021.
Segment operating margin (adjusted, non-GAAP) climbed to 14.6% for the quarter and to 14% for the first nine months, the company reported.
The profit margin represents a historic high for AECOM in its fiscal third quarter, the company reported.
Gaurav Kapoor, AECOM's chief financial officer, noted in a statement that the company had increased its earnings per share guidance to investors and that it had been able to return "more than $400 million to investors this year through dividends and share repurchases."
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Andrew Wittmann, senior construction sector research analyst at Robert W. Baird & Co., noted in an Aug. 9 research note that AECOM management said that its identified award prospects were up 40% year over year, "including within the more cyclical construction management business," and that the firm's "lower-risk engineering/consulting variable-cost model remains attractive" against continuing uncertain economic trends.
Jacobs Results
Jacobs (NYSE: J) reported net earnings from continuing operations of $196 million for its third fiscal quarter, compared to $166 million for the same quarter in 2021. Year-to-date net earnings are $419 million, compared to $422 million for the prior year's nine months.
The company reported revenue in the third fiscal quarter of 2022 of $3.83 billion, compared to $3.58 billion for the same period last year, and $11.04 billion for the nine-month period, compared to $10.51 billion for the same nine months in 2021.
One big difference is that roughly 27% of Jacobs' revenue comes from non-construction-related markets in health and life sciences (11%) and national security (16%). Another 11% falls under the category of space, some of which is building facilities for the National Aeronautics and Space Administration, but the category also includes consulting or engineering related to flight control and operations and equipment.
The various consulting, technical services consulting and design services offered by Jacobs run the gamut from debris management to cybersecurity.
Jacobs performs its space-related work under its Critical Missions Solutions unit, which accounted for $3.8 billion of revenue for the first nine months of 2022.
Jacobs' People & Places Solutions unit is responsible for more of its construction-related work involving infrastructure modernization, climate response and supply-chain diversification.
Jacobs is number one on ENR's list of top program managers.
Kevin Berryman, Jacobs' president and chief financial officer, stressed the company's healthy operating profit margins in its fiscal third quarter during a presentation to investment analysts Aug. 1.
The People & Places Solutions unit had an operating profit (as a percent of net revenue) of 13.2%, compared to 13.8% in the same period in 2021. Critical Missions Solutions had a margin of 7.9% for the 2022 quarter, with the figure at 8.9% the year prior.
All signs pointed to those margins staying healthy or improving for the rest of 2022 and in 2023, company executives said.
