The increase is largely attributed to AECOM’s mammoth expansion during 2014, with acquisitions beefing up company revenue while the firm works to turn around slight decline in organic growth in two of the firm’s three operating segments.
In October, AECOM closed a $6 billion takeover of engineering, design and construction firm URS. This significantly boosted the financial performance of its design and consulting segment, which despite a 2% decline in organic growth, posted a 44% increase in first quarter revenue to $1.9 billion.
A similar, more telling, story can be told of AECOM’s management services segment.
While the segment’s organic revenue slowed its decline to 8% compared to 9% in the previous quarter, total revenue increased 248% to $779 million.
The same cannot be said of AECOM’s new construction services segment, which generated $1.5 billion in the quarter and recorded a 25% increase in organic revenue.
Construction services already underpinned strong growth at AECOM in the fourth quarter last year thanks to continued strength in markets in Europe, the Middle East, Africa, and Asia. The division was further boosted in July, with AECOM’s acquisition of the Hunt Construction Group, providing the firm with an additional $3 billion in backlog revenue by the end of last year.
Overall, AECOM’s operating income for the quarter equalled $15 million, net loss totalled $104 million, and the loss per share equalled 73c. On an adjusted basis, diluted earnings per share were 71c for the quarter, with AECOM affirming fiscal year 2015 adjusted EPS guidance of $2.75 to $3.35.
New wins in the quarter of $4.6 billion were driven by growth in the Americas, Asia-Pacific and the firm’s building construction business. After adjusting for acquisitions, total backlog increased 16%.
Cash flow from operations for the quarter was $283 million. Free cash flow, which includes capital expenditures of $30 million in the quarter, was $253 million.
On the balance sheet as of December 31 last year, AECOM had $735 million of total cash and cash equivalents and $4.98 billion of debt.
AECOM CEO Michael Burke was pleased with the results.
“AECOM delivered strong operating results and wins in the fiscal first quarter due to our widely diversified business model,” he said.
“We are pleased with our organic growth as we focus on the successful integration of our acquisition of URS, which we completed in the quarter.”
AECOM president and CFO Stephen Kadenacy added: “We started the year by delivering strong free cash flow. We began to repay debt during the quarter and are on track to achieve our long-term leverage target.”