skip to content
  1. Home
  2. >
  3. Questions
  4. >
  5. ARE: I know Aecon had a loss this quarter, but I thought it was generally okay. [Aecon Group Inc.]
You can view 2 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I know Aecon had a loss this quarter, but I thought it was generally okay. Do you have any comments?
Asked by Tom on April 27, 2023
5i Research Answer:

EPS of 15c did beat estimates of -25c. Sales of $1.1B beat estimates of $1.03B. EBITDA of $24.6M missed estimates of $26.85M. The issue here is cost inflation on fixed-priced contracts. Four fixed priced contracts added $2.8M to Q1 losses, and $120M for 2022. Lower traffic at the Bermuda Airport was also a factor (returns are driven by passenger levels). The backlog is strong and it announced a large freeway contract, but escalating costs are going to worry investors until inflation subsides or it can adjust contract terms (on new contracts only, most likely). Fixed-priced contracts are always risky. EPS is expected to grow in 2023, and the stock had a huge run so saw a lot of profit taking on Wednesday. At 16X earnings we do not have huge concerns, but it may drift as this news is digested.