AECOM’s (ACM) Record Backlog Collides With A Costly Charge

AECOM reported a record backlog and strong third quarter, but faced a costly $337 million charge due to delays in a construction project. Backlog increased by 13% to a new all-time high, driven by record wins and a high book-to-burn ratio. Adjusted EBITDA and earnings per share grew year over year, and the company raised its adjusted EBITDA margin outlook.

Notable wins included Canada's 10-year highway and bus transit project, Australia's backlog jump, and the UK's Great Grid electricity upgrade. However, the company still faces challenges from slower-than-anticipated new construction project starts and the ongoing Middle East conflict. The $337 million charge from a 2019 construction management project, with a projected substantial completion date in late 2027, continues to impact the financials and is expected to increase interest expenses.