AECOM Technology Earnings: Here’s Why Shares are Crashing 12%

AECOM Technology Corporation (NYSE:ACM) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 11.86%.

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AECOM Technology Corporation Earnings Cheat Sheet

Results: Net income increased 5.29% to $92 million (83 cents per diluted share) in the quarter versus a net gain of $87.38 million in the year-earlier quarter.

Revenue: Decreased 1.8% to $2.08 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: AECOM Technology Corporation reported adjusted net income of 83 cents per share. By that measure, the company beat the mean analyst estimate of $0.82. It missed the average revenue estimate of $2.22 billion.

Quoting Management:

“I am pleased with the progress that we made sequentially in the quarter on growth and profitability,” said John M. Dionisio, AECOM chairman and chief executive officer. “We won $2.3 billion in new wins during the quarter, driving backlog up 3% year over year to $16 billion. Our unyielding commitment to improved profitability lifted EBITDA margins to 12% — a record level for the fourth quarter. Our results clearly demonstrate the progress that we’ve made to drive a performance culture committed to improved growth, profitability and liquidity. For fiscal year 2013, we are targeting earnings per share of $2.40-$2.50, which reflects continued pressure on growth as a result of the global macro-economic climate.”

“Our company-wide focus on improving our cash-conversion metrics allowed us to generate $211 million in free cash flow for the quarter and $370 million for the year,” said AECOM President Michael S. Burke. “In addition, our liquidity and balanced capital allocation strategy allowed us to spend $62 million in the quarter to repurchase 3 million shares. Since the inception of our repurchase program in 2011, we have invested over $300 million to repurchase 15 million shares, reducing our share count by 13%.”

Key Stats:

Revenue decreased 0.72% from $2.1 billion in the previous quarter. Net income increased 32.55% from $69.41 million in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.49 to a profit $0.50. For the current year, the average estimate has moved down from a profit of $2.30 to a profit of $2.29 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)

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