AECOM Technology Corp. gave investors some good news in its first quarter 2010 earnings announcement, released on Feb. 9.
The firm reported revenue up 2% to $1.5 billion, for the three months ending Dec. 31, 2009, compared to the same period a year earlier. Backlog jumped 11% in the quarter to $10 billion and net income increased 12%, to $46 million over last year.
Based in Los Angeles, AECOM has built itself through acquisitions that have broadened its reach and made results less sensitive to a fall-off in one sector of the economy or world. The company acknowledged that first quarter operating income decreased 5% , year over year, because of what the company says was a one-time charge of $8.2 million linked to layoff and severance costs in the U.K. and “marketing and branding” expenses of its launch of a global branding initiative.
But the design firm says it is “on track” to meet earnings targets in 2010.
CEO John M. Dionisio reported “particularly solid” markets in North America, Asia, Australia and the Middle East. He said the firm is pursuing nearly $15 billion in new U.S. government work and has benefited in its transportation and facilities businesses from the federal stimulus.
AECOM did note decreased results in its professional technical services unit, which includes planning, architecture, consulting, engineering and construction management for institutional, commercial and government clients. The firm reported quarter revenue for the unit down 2% to $120 million, over the first quarter of 2009, and operating income off 3% to $76 million. But its management support services unit, which serves federal agencies, made up the gap, with revenue up 24% and operating income rising 34%, the firm reported.
AECOM report new contract wins of more than $750 million in January alone.
These include a $166-million contract to manage the estimated $2.5 billion widening of the New Jersey Turnpike, in joint venture with Parsons Brinckerhoff, New York City, and Greenman-Pedersen, Babylon, N.Y., and a $16-million construction management contract for the first phase of a new U.S. Dept. of Homeland Security headquarters complex in Washington, D.C., in joint venture with Tishman Construction Corp., New York City. The project, estimated at between $3 and $4 billion, is set for completion in 2016.
At least one analyst agreed. "Growth in backlog will start to accelerate even more in the second half of the fiscal year when you will start seeing stimulus dollars flow in a more meaningful way," says Andrea Wirth, analyst with Robert W. Baird & Co., Milwaukee.