Aecon is down alot. Can you please comment on the results? Thanks very much
Revenue of $1.17B rose 3.9% year over year, and was slightly ahead of estimates of $1.15B. EPS of 38c rose from a loss last year, and ahead of 12c estimated. Backlog was $6.85B, up 3.7% and ahead of estimates. EBITDA fell sharply to $16.7M, down 57%, and missed estimates by a mile ($55.2M). Once again, fixed priced contracts are hurting the company. Four projects cost it an operating loss of $81.3M, compared with a loss of $28.2M last year. The cost overruns were blamed on inflation, site conditions, covid, supply chain disruptions, labour and general inflation. The stock had been nicely up on the year and is now still up 15%. Investors do not like fixed cost overruns, as they can add considerable uncertainty. We think though it is cheap enough with the hit (11X earnings) to stay a hold. The dividend was maintained and overall earnings growth is still expected in calendar 2023 and 2024.