AECOM: Our Exposure to Federal 'Budget Scrutiny' Is Minimal
AECOM posted strong earnings growth in its latest quarter.
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AECOM executives told investors in an earnings conference call presentation Feb. 4 that its future earnings won't be limited by federal budget cuts, with almost one out of three dollars in revenue coming from state and local governments.
The Trump administration's program of "budget scrutiny" is unlikely to affect company revenue and profitability, the executives stated, with one noting that AECOM's revenue mix is highly diversified by "client, market sector and geography."
The U.S. Environmental Protection Agency, which the administration is expected to scale back, and the U.S. Agency for International Development—which has suspended operations and which Trump ally Elon Musk claims the president has agreed should be shut down—together account for 0.5% of the Dallas-based engineering and construction giant's net service revenue—revenue less pass-through revenue.
The company reported sharply higher net income for the quarter ending Dec. 31, 2024, with $167 million compared to $94 million for the same quarter in the prior year, on slightly higher annual revenue, $4.1 billion compared to $3.19 billion in 2023.
“The benefits of our 'Think and Act Globally' strategy are evident in our high win rates and record backlog,” said Lara Poloni, AECOM president. She said the company investment in its new water and environment advisory business is already bearing fruit and AECOM is confident it can double its $200 million in annual net service revenue in three years.
The firm in October 2024 hired Jill Hudkins, who stepped down last May as president of consultant Tetra Tech, to be CEO of the new business line that is set to expand work in advanced digital water asset management and PFAS remediation, AECOM said.
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