What happened

Shares of engineering and construction firm AECOM (ACM 0.34%) -- a key player among companies trying to commercialize Elon Musk's vaunted "hyperloop" transportation technology -- crashed 10% in early Monday trading after reporting fiscal Q4 2018 earnings this morning.

AECOM reported pro-forma profits of $0.83 per share, ahead of Wall Street's expected $0.81 profit. AECOM's sales of $5.31 billion likewise trumped expectations for $5.26 billion, but investors are selling off the stock -- still down 8.1% as of 12:50 p.m. EST -- regardless.

Cartoon characters seem confused over a falling stock chart.

AECOM's earnings weren't the problem today -- it was AECOM's guidance that caused the sell-off. Image source: Getty Images.

So what

AECOM's sales and operating profits both rose 9% year over year, and free cash flow hit an all-time quarterly record of $511 million. However, net income at the company declined 5%.

Now what

That's not a great result, but what's taking the stock down today is more likely guidance for the coming fiscal year rather than AECOM's admission that profits declined in Q4 of last year. Issuing new guidance for fiscal 2019, AECOM told investors it expects to book between $2.60 and $2.90 per share in pro-forma profit -- numbers far below the $3.01 per share profit that Wall Street was looking for.

Regardless, I can't say as I find AECOM's guidance quite as disturbing as other investors (apparently) do. Management noted that it expects to improve on last year's already-fine free cash flow performance and generate between $600 million and $800 million in cash profit in 2019 (a promise supported by the fact that AECOM says its backlog of work to be done grew healthily in Q4, ending the year up 14% and thus growing even faster than sales).

Taken at the midpoint, AECOM's free cash flow guidance implies a valuation of less than 7 times FCF on AECOM's stock -- and an enterprise value of barely 11 times FCF. For a company growing sales at 9% and growing backlog even faster, I think these are fine valuations -- and AECOM's sell-off won't be long lasting.