AECOM Wins $700M Contract From Alliant Energy Subsidiary

Multinational engineering firm AECOM (NYSE:ACM) recently announced that it has been chosen as the Engineering, Procurement and Construction (“EPC”) contractor for the Alliant Energy’s Riverside Energy Center expansion project. This contract, valued at $700 million, will be booked in the company’s backlog for fiscal third quarter.

Alliant Energy Corporation’s (TO:LN) Wisconsin utility subsidiary, Wisconsin Power and Light Company (WPL), is engaged in providing electricity service to thousands of customers across central and southern Wisconsin. The upcoming facility will run on gas-fired combustion turbine technology to generate 700 megawatts of electricity for the Alliant Energy customers.

Per the contract, AECOM will be responsible for designing, supplying, installing and starting-up of a 2×1 gas-fired combine cycle. AECOM’s Construction Services group will supervise engineering, procurement, construction and commissioning services for the project and it is expected to be completed by early 2020. On completion, this will be one of Wisconsin’s largest development projects that prioritized the issue of future energy conversion.

AECOM’s diversified portfolio comprises of both designing and construction services. In addition, the company’s business is spread across a number of key markets that mitigates operating risks. This is a major advantage for a Construction Services group which has already supplemented organic revenue growth by 25% in the second quarter of fiscal 2016. Going forward, the company is expected to witness bright prospects in New York, London and Los Angeles, thereby adding to its strength.

Lucrative contract wins coupled with a robust backlog level of over $39 billion at the end of second fiscal quarter, signals strong top-line growth in the future. A diversified portfolio also offers the company a safeguard against market volatility and minimizes losses in times of economic crisis.

AECOM currently holds Zacks Rank #3 (Hold). Better-ranked stocks in the broader sector include Willdan Group, Inc. (NASDAQ:WLDN) and EnerSys (NYSE:ENS) . Both stocks carry a Zacks Rank #2 (Buy).