Amentum

Amentum finished the quarter with 48.2 billion dollars of work under contract, up 8 percent from a year ago, against annual revenue of roughly 14 billion dollars. That is more than three years of visible work. Over the last twelve months they booked 1.3 dollars of new work for every dollar delivered, including 17.7 billion dollars in net bookings.

Even with revenue slightly lower, profit went the other way. Operating income jumped 67 percent to 172 million dollars and net income rose to 66 million from just 10 million a year ago. Free cash flow climbed 35 percent to 135 million dollars, and management raised full year profit guidance to as much as 2.50 per share.

Revenue slipped 2 percent to 3.49 billion dollars as older programs wound down and some contracts moved into joint ventures that no longer count in the totals. Management also cut the full year revenue outlook to a range of 13.8 to 13.95 billion dollars. Growing profits on a shrinking base only works for so long.

Amentum still carries 3.88 billion dollars of gross debt against just 459 million dollars of cash. They paid down 125 million dollars voluntarily this quarter, which is real progress, but until the balance sheet is lighter the company has limited room to make acquisitions or return much money to shareholders.