Los Angeles — AECOM reported first quarter revenue of $4.4 billion. Net income and diluted earnings per share were $47 million and $0.30 in the first quarter, respectively. On an adjusted basis, diluted earnings per share was $0.53.

“Drawing on our full suite of capabilities and global reach, AECOM’s strong momentum has continued into fiscal 2017,” said Michael S. Burke, AECOM’s chairman and chief executive officer. “Our first quarter wins totaled nearly $6 billion, highlighted by the selection of our joint venture for the more than $1 billion decommissioning of the San Onofre Nuclear Generating Station (SONGS). Importantly, our confidence in the five-year financial targets that we introduced in December is bolstered by the bipartisan support for infrastructure, the more than $200 billion global nuclear decommissioning market, prospects for increased defense spending, and the new administration’s emphasis on improving the climate for business investment in the U.S.”

“We have never been better positioned to capitalize on the improving trends across our markets” said Stephen M. Kadenacy, AECOM’s president and chief operating officer. “Our strong wins and growing pipeline reflect increased investments in business development and a focus on driving collaboration across the company.”

“Our earnings result met our expectations and included a $0.12 benefit from legal proceedings, primarily related to the legal settlement we disclosed in November 23, 2016 and included as part of updated financial guidance,” said W. Troy Rudd, AECOM’s chief financial officer. “Importantly, we delivered operating cash flow that is consistent with normal phasing and our plan for the year.”

Wins and backlog

Wins in the quarter of $5.9 billion resulted in a book-to-burn ratio of 1.3. Wins were broad based and included the selection of our joint venture for the SONGS decommissioning project, a record $1.7 billion of wins in Management Services, and a large gas power plant in the U.S. Total backlog increased 2 percent year-over-year to $43.8 billion, the highest ever reported by the company.

Business segments

In addition to providing consolidated financial results, AECOM reports separate financial information for its three segments: Design & Consulting Services, Construction Services and Management Services.

Design & Consulting Services (DCS) — The DCS segment delivers planning, consulting, architectural and engineering design services to commercial and government clients worldwide in markets such as transportation, facilities, environmental, energy, water and government.

Revenue in the first quarter was $1.8 billion. Constant-currency organic revenue increased by 1 percent, highlighted by 2 percent growth in the Americas, 8 percent growth in the U.K., and 7 percent growth in Australia, partially offset by a decline in markets impacted by lower oil and gas prices.

Operating income was $99 million compared to $82 million in the year ago period. On an adjusted basis, operating income was $108 million compared to $121 million in the year ago period. The first quarter performance reflects strong underlying execution offset by increased business development investments to capitalize on improved market trends and lower contribution from normal margin.

Construction Services (CS) — The CS segment provides construction services for energy, sports, commercial, industrial, and public and private infrastructure clients.

Revenue in the first quarter was $1.8 billion. Constant-currency organic revenue increased by 2 percent, highlighted by 3 percent growth in the Building Construction business and 9 percent growth in the Energy and Industrial Construction business, which more than offset continued Oil & Gas market weakness.

Operating income was $18 million compared to an operating loss of $27 million in the year ago period. On an adjusted basis, operating income was $25 million compared to $30 million in the year ago period.

Management Services (MS) — The MS segment provides program and facilities management and maintenance, training, logistics, consulting, technical assistance and systems-integration services and information technology services, primarily for agencies of the U.S. government, national governments around the world and commercial customers.

Revenue in the first quarter was $767 million. Constant-currency organic increased by 1 percent.

Operating income was $74 million compared to $70 million in the year ago period. On an adjusted basis, operating income was $87 million compared to $97 million in the year ago period. First quarter operating income benefitted by approximately $35 million from legal proceedings.

AECOM had $698 million of total cash and cash equivalents, $3.5 billion of net debt and $862 million in unused capacity under its $1.05 billion revolving credit facility. Total debt has declined by $1.2 billion since closing the URS acquisition in October, 2014.

Financial outlook

AECOM is reiterating fiscal year 2017 adjusted EPS guidance of $2.80 to $3.20, which includes approximately $0.20 of anticipated gains related to AECOM Capital realizations.

The company expects fiscal 2017 full year interest expense, excluding amortization of deferred financing fees, of approximately $190 million and a full-year share count of 159 million.

The company expects an effective tax rate for adjusted earnings of approximately 20 percent, which is similar to fiscal 2016.

The company expects $30 million of acquisition and integration expenses during the fiscal year.

Fiscal year 2017 capital expenditures are expected to be approximately $115 million. The company expects depreciation expense of approximately $165 million and the amortization of intangible assets10 to be approximately $95 million.

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