AECOM Technology (NYSE: ACM) reported Q3 EPS of $0.62, $0.01 worse than the analyst estimate of $0.63. Revenue for the quarter came in at $5.15 billion versus the consensus estimate of $4.86 billion.

• Organic4 revenue increased by 10% over the prior year, which marks the seventh consecutive quarter of positive organic growth, led by the higher-margin DCS and MS segments and growth in all three segments.
• Adjusted EBITDA of $223 million increased by 15% year-over-year after adjusting for the large AECOM Capital gain in the prior-year quarter; sequential adjusted EBITDA growth of 11% was ahead of prior guidance for slight growth.
• Total backlog reached a new record of $54 billion, a 16%3 increase over the prior year, which includes a continued favorable mix shift to the higher-margin DCS and MS segments.
• Wins of $9.4 billion also set a new record, resulting in a 1.7x book-to-burn5 ratio, and included solid performance across the business.
• Delivered positive free cash flow2 for the 23rd time in the past 25 quarters, and total debt declined by $69 million; cash flow was impacted due to working capital used to support 13% revenue growth, primarily from increased storm recovery work in the Americas.

“Our record revenue and all-time high backlog are evidence that our design, build, finance, and operate vision, along with our leading scale and broad geographic reach, are resulting in a differentiated competitive offering and strong performance,” said Michael S. Burke, AECOM’s chairman and chief executive officer. “In addition to our accomplishments in the quarter, we are off to a strong start in the fourth quarter, including sizable wins that increase our confidence in continued backlog growth. As a result, we are moving forward with share repurchases under a $150 million ASR, reflecting our industry-leading track record of superior cash generation and the strong tailwinds driving our performance. We believe buying our shares at current prices will create long-term value for our shareholders.”

“Our strong third quarter results demonstrate the progress we are making on our five-year financial plan through fiscal 2022 to deliver a 5%+ revenue CAGR, 7%+ adjusted EBITDA CAGR, 12-15% adjusted EPS CAGR, and at least $3.5 billion of cumulative free cash flow,” said W. Troy Rudd, AECOM’s chief financial officer. “In fact, we are already outperforming our revenue growth targets and, after adjusting for the large AECOM Capital gain in the year-ago period, our EBITDA growth is also outperforming. We are on track to maximize shareholder value through our capital allocation commitments.”

GUIDANCE:

AECOM Technology sees FY2018 EPS of $2.50-$2.90, versus the consensus of $2.68.

For earnings history and earnings-related data on AECOM Technology (ACM) click here.