The stock will likely gap down significantly on the massive earnings miss and guidance cut. Traders should watch the conference call for details on the CM project's remaining exposure and any update on claims recovery. The record backlog and strong design margins suggest the core business is intact, but the capital allocation pause (shift from buybacks to organic investment) signals near-term caution.
Price Chart
Executive Summary
AECOM reported a disastrous Q3 fiscal 2026, with a $337M pre-tax charge on a legacy Construction Management project driving a GAAP net loss of $0.65/share and an adjusted loss of $0.50/share, a massive miss vs. the $1.62 consensus. The company slashed its full-year adjusted EPS guidance to $3.95-$4.15 (from $5.90-$6.10) and free cash flow to ~$300M (from ~$400M), though underlying design business backlog grew 13% to a record. The stock will react sharply to the earnings miss and guidance cut, but the record backlog and strong underlying design margins provide a partial offset for longer-term holders.
Key Financial Metrics
Key Facts
- GAAP diluted EPS from continuing operations was -$0.65, vs. consensus of $1.62.
- Adjusted (non-GAAP) diluted EPS was -$0.50, vs. consensus of $1.62.
- Revenue fell 14% YoY to $3.586B, missing the $4.41B consensus.
- Net service revenue (NSR) fell 16% YoY to $1.609B.
- Results included a $337M pre-tax charge on a legacy Construction Management project.
- Full-year fiscal 2026 adjusted EPS guidance slashed to $3.95-$4.15 from $5.90-$6.10.
- Full-year free cash flow guidance cut to ~$300M from ~$400M.
- Total backlog grew 13% YoY to a record $27.8B, driven by a 1.6 book-to-burn ratio.
- Excluding the CM charge, adjusted EPS would have been $1.49 (+11% YoY), and adjusted EBITDA $329M (+5% YoY).
Financial Impact
A $337M pre-tax charge on a single project erased quarterly profitability and forced a ~30% cut to full-year adjusted EPS guidance (from $5.90-$6.10 to $3.95-$4.15) and a 25% cut to free cash flow guidance (from ~$400M to ~$300M).
Risk Factors
- Additional cost overruns on the legacy Construction Management project before its expected completion in Q2 FY2027.
- Failure to recover claims on the CM project, which could take years of litigation.
- Further deterioration in the Middle East business due to ongoing conflict.
- Delayed project starts in the Construction Management business weighing on future NSR growth.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001104659-26-093421 |
| Document: tm2622489d1_8k.htm | 0001104659-26-093421 |
| Document: 0001104659-26-093421-index-headers.html | 0001104659-26-093421 |
| Document: 0001104659-26-093421-index.html | 0001104659-26-093421 |
| Document: 0001104659-26-093421.txt | 0001104659-26-093421 |
| 8-K Data (Synthetic) | 0001104659-26-093421 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 14, 2026 7w ago | Press Release | $63.11 $64.60 | ▼ −2.36% | ▼ −4.35% | $59.66 (+5.47%) |
Aug 10, 2026 7w ago | 8-K | $67.05 $64.02 | ▲ +4.52% | ▲ +3.46% | $59.66 (+11.02%) |
Aug 7, 2026 8w ago | Institutional Cluster | $75.81 $66.58 | ▲ +12.17% | ▲ +11.77% | $59.66 (+21.30%) |
Jun 30, 2026 13w ago | Court Ruling | $69.80 $70.96 | ▲ +1.66% | ▲ +2.69% | $59.66 (−14.53%) |
Jun 11, 2026 16w ago | 8-K | $70.12 $68.25 | ▼ −2.67% | ▼ −4.45% | $59.66 (−14.92%) |
Jun 3, 2026 17w ago | 8-K | $72.40 $66.86 | ▼ −7.65% | ▼ −6.52% | $59.66 (−17.59%) |
May 11, 2026 20w ago | 8-K | $69.86 $68.58 | ▼ −1.83% | ▼ −0.10% | $59.66 (−14.60%) |
Mar 5, 2026 30w ago | 8-K | $93.69 $84.71 | ▼ −9.59% | ▼ −7.54% | $59.66 (−36.32%) |
US Market Status
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