AECOM on Tuesday reported a 5% drop in overall revenue for the third quarter of its 2020 fiscal year, while income figures mostly rose.
Revenue fell from nearly $3.4 billion in third-quarter 2019 to just shy of $3.2 billion for the three-month reporting period through June 30. However, net service revenue (which excludes subcontractor expenses) remained flat at $1.5 billion.
Quarterly operating income dipped 5% on an as-reported basis for the Los Angeles-based infrastructure specialist, to $119 million. Adjusted operating income, though, rose 21% on a year-over-year basis, to $156 million. Net income was up in both line items: rising 63% on an as-reported basis, to $91 million; and up 28% on an adjusted basis, to $88 million.
Through three quarters of fiscal 2020, AECOM brought in $9.7 billion in revenue, which was also down 5% from the prior year. Net service revenue remained steady there as well, at $4.6 billion. Income numbers were up across the board: $316 million in operating income on an as-reported basis, and $459 million on an adjusted basis; $171 million in net income on an as-reported basis, and $251 million on an adjusted basis.
As the COVID-19 pandemic spread, AECOM shifted over 90% of its workforce to telework to curb the spread of the virus. However, much of its work has been deemed essential or critical, blunting the impact on earnings, according to a press release.
“I am extremely proud of the organization’s efforts amidst unprecedented challenges and as we further our transformation to an industry-leading Professional Services business,” Chairman and CEO Michael Burke said in the release.
Burke is preparing to retire after six years as AECOM chief executive. He will be succeeded on Oct. 1 by Chief Financial Officer W. Troy Rudd.
On Jan. 31, AECOM completed the $2.4 billion sale of its Management Services business, which housed contracts for the Department of Energy and other federal government agencies. Under ownership of private-equity firms Lindsay Goldberg and American Securities, the business is now the stand-alone company Amentum.
AECOM is also winding down its at-risk self-perform construction segment, which includes its partnership with nuclear services firm EnergySolutions in the decommissioning contractor for the San Onofre Nuclear Generating Station (SONGS) in California. Management has said it plans to sell its stake in SONGS Decommissioning Solutions, but to date has not identified the intended buyer.
AECOM has scheduled a conference call on its latest earnings for noon Eastern time today.
