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AECOM Q4 Earnings Beat Estimates, Up Y/Y, Raises Dividend by 18%
AECOMAECOM(US:ACM) ZACKSยท2024-11-19 15:20

Core Insights - AECOM reported strong fourth-quarter fiscal 2024 results, with earnings exceeding estimates and showing year-over-year growth, driven by solid organic net service revenue growth in its design business [1][4][5] Financial Performance - Adjusted earnings per share (EPS) reached $1.27, surpassing the consensus estimate of $1.22 by 4.1% and increasing 25.7% from $1.01 in the prior-year quarter [4] - Revenues totaled $4.11 billion, reflecting a 7% year-over-year increase, while adjusted net service revenues (NSR) rose 5% to $1.81 billion [5] - Adjusted operating income was $207.7 million, up 9% year over year, with an adjusted operating margin expanding 70 basis points to 19.6% [7] Segment Performance - Americas' revenues were $3.16 billion, an 8% increase from the prior year, with NSR growing 6% to $1.06 billion, supported by an 8% growth in the design business [6] - International revenues increased 5% year over year to $948.4 million, with NSR rising 4% to $754.1 million [8] Dividend and Share Repurchase - AECOM announced an 18% increase in its quarterly dividend payout to 26 cents, payable on January 17, 2025, to stockholders of record on January 2 [3] - The company increased its share repurchase authorization to $1 billion [3] Backlog and Opportunities - Total backlog at the end of fiscal 2024 was $23.86 billion, up from $23.16 billion a year ago, with a 5% increase in the design business backlog [13] - The pipeline of opportunities grew by 10%, driven by robust funding across major markets [13] Fiscal 2024 Highlights - For the full year, AECOM reported revenues of $16.1 billion, a 12% increase from the previous year, with NSR reaching an all-time high [14] - Adjusted EPS increased 22% to $4.52, with adjusted EBITDA margins rising 100 basis points to 16% [15] Liquidity and Cash Flow - Cash and cash equivalents at fiscal 2024-end totaled $1.58 billion, up from $1.26 billion a year earlier, while total debt increased to $2.54 billion [16] - Adjusted operating cash flow rose 19% year over year to $827 million, and adjusted free cash flow increased 20% to $708 million [16] Fiscal 2025 Guidance - AECOM anticipates 5-8% organic NSR growth in fiscal 2025, with adjusted EPS expected in the range of $5.00-$5.20, indicating a 13% improvement from fiscal 2024 [17] - Adjusted EBITDA is projected to be between $1.17 billion and $1.21 billion, reflecting a 9% year-over-year growth at the midpoint [17] Long-Term Outlook - The company expects to achieve 5-8% organic NSR growth, at least 20-30 basis points adjusted EBITDA margin expansion, and double-digit adjusted EPS growth annually [19] - AECOM aims for at least 17% adjusted EBITDA margin by the end of fiscal 2026 and approximately 100% conversion of adjusted net income to free cash flow [19]