AECOM Q3 revenue beats on design business growth

Overview

• US infrastructure services firm's fiscal Q3 revenue beat analyst expectations

• Company backlog rose 13% to a record high, driven by strong new wins

Outlook

• AECOM now expects fiscal 2026 adjusted EPS of $3.95-$4.15 and adjusted EBITDA of $935-$965 mln

• Company sees fiscal 2026 total NSR of $7.30-$7.35 bln and free cash flow of about $300 mln

Result Drivers

• PROJECT CHARGE - $337 mln pre-tax charge from delayed Construction Management project drove quarterly loss; co cited lower subcontractor productivity as cause

• DESIGN BUSINESS GROWTH - Net service revenue in design business rose 4% (5% adjusted for fewer working days), led by Americas and International segments

• INTERNATIONAL SEGMENT IMPROVEMENT - International segment operating income rose 21% and margin increased 240 bps, helped by growth in UK and Australia and restructuring actions

Company press release: ID:nBw1ngjTza

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the construction engineering peer group is "buy"

• Wall Street's median 12-month price target for AECOM is $100.50, about 32.5% above its August 7 closing price of $75.84

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 13 three months ago

Reuters Recommended Reads

• Aug 10 - Bernhard Capital to take Bowman Consulting private in $1 billion deal

• Aug 10 - Business process solutions firm Conduent Q2 revenue slips

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)