Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of engineering company AECOM Technology
So what: AECOM's second-quarter profit miss -- $0.43 versus the consensus of $0.45 -- and full-year profit warning are forcing analysts to lower their growth estimates on the stock. While the company saw strength in its professional technical services segment, "challenges" at its management support services segment continue to weigh on margins, triggering investor concerns over its profitability going forward.
Now what: Management now sees 2012 EPS of $2.30 to $2.45, down from its prior view of $2.45 to $2.65. However, thanks to a growing backlog and expected margin improvement in the second half, president Michael Burke said the company still expects to achieve its target of "generating free cash flow roughly equal to net income" in 2012. So given AECOM's still-solid fundamentals, today's pullback might be a good buy-in opportuntiy for long-term investors.
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