Parsons Q2 revenue misses estimates on portfolio restructuring charges

Overview

• US infrastructure and defense tech firm's Q2 revenue fell 1% and missed analyst expectations

• Adjusted EPS for Q2 was negative and missed analyst expectations, impacted by portfolio and JV charges

• Adjusted EBITDA for Q2 dropped 72% and missed analyst expectations

Outlook

• Parsons lowers FY 2026 revenue guidance to $6.2 bln-$6.5 bln from $6.5 bln-$6.8 bln

• Company cuts FY 2026 adjusted EBITDA guidance to $500 mln-$560 mln from $615 mln-$675 mln

• Parsons expects FY 2026 operating cash flow of $430 mln-$490 mln, down from $470 mln-$530 mln prior

Result Drivers

• PORTFOLIO AND JV CHARGES - Q2 results were heavily impacted by $118 mln in charges related to portfolio-shaping actions and a joint venture program, which reduced operating income, net income, and adjusted EBITDA

• INFRASTRUCTURE MARGINS AND ACQUISITIONS - Excluding charges, adjusted EBITDA and margin improved due to higher infrastructure margins and contributions from accretive acquisitions

• MIDDLE EAST GROWTH - Critical Infrastructure segment revenue rose, led by 10% organic growth in the Middle East, offsetting some declines elsewhere

Company press release: ID:nGNX1bKlB

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the aerospace defense peer group is "buy"

• Wall Street's median 12-month price target for Parsons Corp is $71.00, about 14.5% above its July 28 closing price of $62.03

• The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 16 three months ago

Reuters Recommended Reads

• July 28 - Orion Group Q2 adjusted EPS and EBITDA miss estimates; lowers FY outlook

• July 28 - Textron Q2 revenue meets estimates on military programs growth

• July 27 - Germany's Hochtief H1 operational net profit rises on infrastructure demand; raises guidance

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)