AECOM (ACM) Reports Earnings Tomorrow: What To Expect

AECOM (ACM), the world's trusted infrastructure consulting firm, is set to report its third quarter fiscal 2024 earnings tomorrow. Investors are eagerly awaiting the results, as the company has been on a strong earnings growth trajectory. In this article, we will explore what to expect from AECOM's earnings report, based on recent trends and market data.

AECOM has consistently delivered impressive earnings growth over the past year. In the second quarter fiscal 2024, the company reported a 13% increase in revenue and a 10% increase in adjusted EBITDA, driven by strong performance across all of its largest end markets. The company's adjusted EPS also increased by 13% year-over-year, reflecting the benefits of growth, operating efficiencies, and strong execution.

Looking ahead to tomorrow's earnings report, analysts expect AECOM's revenue to grow by 13% year-over-year, driven by strong performance across all of its largest end markets and continued addressable market expansion. The company's guidance for fiscal 2024 includes expectations for organic NSR2 growth at the lower end of the 8% to 10% range, a segment adjusted operating income margin of approximately 15.6%, and 100%+ free cash flow conversion.

One key metric to watch in AECOM's earnings report is its operating margins. In the second quarter, the company's operating margin decreased by 60 basis points due to restructuring-related expenses. However, the adjusted segment operating margin increased by 70 basis points to 15.1%, driven by growth, operating efficiencies, and strong execution. AECOM's fiscal 2024 guidance includes expectations for a segment adjusted operating income margin of approximately 15.6%, representing a 90 basis point increase from fiscal 2023. This suggests that cost-cutting measures may have a positive impact on operating margins and earnings per share.



Another important factor to consider is AECOM's backlog and pipeline of projects. The company's total backlog reached a record high of $23,362 million in the third quarter of fiscal 2024, up 1% from the previous quarter. The book-to-burn ratio in the higher margin Americas segment was 1.1, reflecting a strong win rate. The pipeline of opportunities also reached a new high, with the pipeline of larger $25+ million pursuits with decisions expected in fiscal 2025 approximately 70% higher compared to the same time last year. This growth in backlog and pipeline suggests that AECOM is well-positioned to deliver on its long-term annual net service revenue growth target of 5-8%.

In conclusion, AECOM's earnings report tomorrow is expected to be a strong one, driven by the company's impressive earnings growth trajectory and positive market trends. Investors should pay close attention to the company's operating margins and backlog and pipeline of projects, as these metrics provide valuable insights into AECOM's future growth prospects. With a balanced and analytical approach to investing, investors can make informed decisions based on the data and trends presented in AECOM's earnings report.