AECOM reported net income from continuing operations of $43 million for the second quarter of 2009, or 40 cents earnings per diluted share. These results represent an increase of 20% over net income from continuing operations of $36 million and an increase of 14% over 35 cents earnings per diluted share, in the year-ago quarter. The net income amount does not include $0.4 million of earnings from discontinued operations associated with non-strategic assets acquired as part of the 2008 Earth Tech transaction, which AECOM intends to divest. Operating income for the second quarter increased 20% year over year to $71 million. For the first half of fiscal 2009, AECOM reported net income from continuing operations of $84 million and operating income of $140 million, an increase of 28% and 36%, respectively, compared to the year-ago period.
Second-quarter of fiscal 2009 revenue increased to $1.5 billion, 29% higher than the year-ago quarter. AECOM’s gross revenue includes a significant amount of pass-through costs and, therefore, the company believes revenue, net of other direct costs, which is a non-GAAP measure, also provides a valuable perspective on its business results.
AECOM’s second quarter revenue, net of other direct costs, increased 29% compared to the same period last year, to $1.0 billion. For the first six months of fiscal 2009, AECOM reported revenue of $3.0 billion and revenue, net of other direct costs of $1.9 billion, an increase of 32% and 30%, respectively, compared to the same period last year.
Business Segments
In addition to providing consolidated financial results, AECOM reports separate financial information for its two segments: Professional Technical Services (PTS) and Management Support Services (MSS).
PTS:
The PTS segment delivers planning, consulting, architecture and engineering design, and program and construction management services to institutional, commercial and government clients worldwide.
For the second quarter of fiscal 2009, the PTS segment reported revenue of $1.2 billion and operating income of $79 million, compared to revenue of $1.0 billion and operating income of $61 million in the year-ago quarter. This represents a 30% increase in revenue and a 31% increase in operating income year over year. PTS revenue, net of other direct costs, increased 27% year over year to $899 million.
MSS:
The MSS segment provides program and facilities management and maintenance, training, logistics, consulting, technical assistance and systems integration services, primarily for agencies of the US government.
For the second quarter of fiscal 2009, the MSS segment reported revenue of $258 million and operating income of $15 million, compared to revenue of $209 million and operating income of $14 million in the year-ago quarter. This represents a 24% increase in revenue and an 8% increase in operating income year over year. MSS revenue, net of other direct costs, increased 67% year over year to $67 million.
Backlog:
AECOM announced backlog totaling $9.2 billion at March 31, 2009, a 30% increase year over year.
“During the second quarter, we continued to effectively execute our growth strategy across our end markets and geographies,” said Michael S. Burke, AECOM executive vice president and chief financial officer. “Continued positive trends in margin improvement, where we saw a 24-basis-point improvement, and backlog growth, where we achieved a $2.1 billion increase in our year-over-year backlog, point to AECOM’s continued solid momentum in our global end markets.”
Outlook:
Based on its results through the second quarter of the fiscal year, as well as its backlog, AECOM has reaffirmed its EPS outlook for fiscal 2009 of $1.60 to $1.70. “Looking ahead, we believe that AECOM will continue to see growth and is well positioned to benefit from continued spending on infrastructure projects around the globe,” said Burke. “As such, we feel confident that our results will be in the upper half of the range.”
“The strength of AECOM’s diversified global business model is reflected in our solid second-quarter results,” said John M. Dionisio, AECOM president and chief executive officer. “Overall, we saw continued strength across our end markets. Our ability to expand client relationships and collaborate across our operations around the globe contributed to the continued growth of our business.
“During the second quarter, we won a number of significant projects,” said Dionisio. “Mega projects such as Crossrail in the United Kingdom, the largest civil infrastructure project in Europe; the New Central Wan Chai Bypass in Hong Kong; and two California High-Speed Rail projects highlighted a quarter that also included key wins in India, the Middle East and Bangladesh.”
