Higher Costs Hurt Aecom’s ProfitOriginally published February 2, 2012 at 10:14 a.m., updated February 2, 2012 at 3:12 p.m.
Aecom Technology Corp. said its fiscal first-quarter net income dropped 16 percent, despite solid revenue growth, as higher costs reduced profits. The earnings were lower than analyst forecasts, but revenue surpassed expectations.
The Los Angeles provider of professional, technical and management support services on Thursday reported net income of $47.9 million (42 cents a share) for the quarter ended Dec. 31. That compares with $56.9 million (48 cents) in the same period a year earlier.
Revenue rose 4.8 percent to $2.03 billion. Analysts surveyed by Thomson Reuters on average had expected profit of 46 cents a share on revenue of $1.93 billion.
The company said its gross margin fell from 5.4 percent to 4.5 percent as direct costs jumped 11 percent. Operating income in professional technical services – its largest segment by revenue – was down 4.7 percent despite a 13 percent increase in revenue Operating income in the management-support group dropped 45 percent, although revenue was up 38 percent.
The company, which serves institutional, commercial and public sector customers, said its backlog of work rose 2 percent to $15.8 billion. The company is maintaining its full-year earnings guidance for profit of between $2.45 and $2.65 a share. The Wall Street consensus is for $2.57.
“Our results for the first quarter are in line with our expectations and consistent with what we discussed on our fourth-quarter earnings call,” said Chief Executive John M. Dionisio in a statement. “More importantly, we delivered key wins across our diversified platform during the quarter – highlighted by significant backlog growth in our emerging markets and across our geographies. We are well positioned to build on this momentum.”
Shares closed down 96 cents, or 4 percent, to $22.79 on the New York Stock Exchange.