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Jacobs Engineering (J) Down 9.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Jacobs Engineering (J - Free Report) . Shares have lost about 9.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Jacobs Engineering due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Jacobs Engineering Group Inc. reported fourth-quarter fiscal 2021 (ended Oct 1, 2021) results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
In connection with the earnings release, the company’s president and CFO Kevin Berryman said, "We achieved the high end of our fiscal 2021 outlook while continuing to invest ahead of multi-year secular growth opportunities. The combination of enhancing our portfolio to higher growth, higher margin solutions, while maintaining operational excellence, drove double-digit earnings growth and cash flow that exceeded expectations. Our Focus 2023 initiative is executing well and unlocking further capacity to invest in our growth accelerators. Looking into fiscal 2022 and beyond we expect double-digit adjusted EBITDA and adjusted EPS growth with continued strong cash flow conversion and value-creating capital deployment."
Earnings & Revenue Discussion
For the reported quarter, adjusted earnings of $1.58 per share outpaced the consensus estimate of $1.49 by 6%. The figure was down 3% from the year-ago period, given a lower tax rate impact of 17 cents in the year-ago period.
Jacobs’ revenues totaled $3.59 billion, which missed the consensus mark of $3.79 billion by 5.3% but increased 1.9% year over year.
Backlog at fiscal 2021-end amounted to $26.6 billion, up 12% from a year ago.
Segment Details
Revenues from the Critical Mission Solutions segment of $1.26 billion decreased 4.9% year over year. Backlog at quarter-end was $10.59 billion, up 16.3% year over year.
Revenues from the People & Places Solutions segment totaled $2.05 billion, which dropped 6.5% year over year. Backlog at quarter-end was $15.74 billion, up 7% year over year.
Meanwhile, PA Consulting contributed $273.3 million to revenues for the fiscal fourth quarter. Quarter-end backlog amounted to $304 million.
Margins Profile
For the quarter under review, adjusted gross profit decreased to $257.9 million from the year-ago level of $969.9 million.
Adjusted operating margin expanded to 9.11% from 8.85% in the prior-year quarter. Adjusted EBITDA was $310.1 million, up 12% year over year.
Fiscal 2021 Highlights
Revenues came in at $14.1 billion, up from $13.57 billion a year ago. Adjusted earnings of $6.29 per share also grew 15% from fiscal 2020. Adjusted EBITDA grew 18% from the year-ago quarter to $1,244 million.
Balance Sheet & Cash Flow
At fiscal 2021-end (Oct 1, 2021), Jacobs had cash and cash equivalents of $1,014.2 million, up from $862.4 million at fiscal 2020-end (Oct 2, 2020). Long-term debt increased to $2.84 billion at fiscal 2021-end from $1.68 billion as of Oct 2, 2020.
The company provided $726.3 million cash for operating activities in fiscal 2021 compared with $806.8 million in the year-ago period. It generated free cash flow of $175.6 million in fourth-quarter fiscal 2021 and $633.5 million in the full year.
Fiscal 2022 Guidance
Jacobs expects adjusted EBITDA between $1,370 million and $1,450 million (depicting growth from $1.1 billion in fiscal 2020). Also, it anticipates adjusted earnings within $6.85-$7.45 per share versus $5.48 per share reported in fiscal 2020.
The company expects adjusted EPS of $10.00 in fiscal 2025. The guidance includes expected benefits to People and Places Solutions from the recently passed Infrastructure Investment and Jobs Act. Jacobs has a robust Critical Mission Solutions sales pipeline and sees sustained growth in PA Consulting.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, Jacobs Engineering has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision looks promising. Notably, Jacobs Engineering has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Jacobs Engineering (J) Down 9.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Jacobs Engineering (J - Free Report) . Shares have lost about 9.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Jacobs Engineering due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Jacobs (J - Free Report) Q4 Earnings Beat, Revenues Miss Estimates
Jacobs Engineering Group Inc. reported fourth-quarter fiscal 2021 (ended Oct 1, 2021) results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
In connection with the earnings release, the company’s president and CFO Kevin Berryman said, "We achieved the high end of our fiscal 2021 outlook while continuing to invest ahead of multi-year secular growth opportunities. The combination of enhancing our portfolio to higher growth, higher margin solutions, while maintaining operational excellence, drove double-digit earnings growth and cash flow that exceeded expectations. Our Focus 2023 initiative is executing well and unlocking further capacity to invest in our growth accelerators. Looking into fiscal 2022 and beyond we expect double-digit adjusted EBITDA and adjusted EPS growth with continued strong cash flow conversion and value-creating capital deployment."
Earnings & Revenue Discussion
For the reported quarter, adjusted earnings of $1.58 per share outpaced the consensus estimate of $1.49 by 6%. The figure was down 3% from the year-ago period, given a lower tax rate impact of 17 cents in the year-ago period.
Jacobs’ revenues totaled $3.59 billion, which missed the consensus mark of $3.79 billion by 5.3% but increased 1.9% year over year.
Backlog at fiscal 2021-end amounted to $26.6 billion, up 12% from a year ago.
Segment Details
Revenues from the Critical Mission Solutions segment of $1.26 billion decreased 4.9% year over year. Backlog at quarter-end was $10.59 billion, up 16.3% year over year.
Revenues from the People & Places Solutions segment totaled $2.05 billion, which dropped 6.5% year over year. Backlog at quarter-end was $15.74 billion, up 7% year over year.
Meanwhile, PA Consulting contributed $273.3 million to revenues for the fiscal fourth quarter. Quarter-end backlog amounted to $304 million.
Margins Profile
For the quarter under review, adjusted gross profit decreased to $257.9 million from the year-ago level of $969.9 million.
Adjusted operating margin expanded to 9.11% from 8.85% in the prior-year quarter. Adjusted EBITDA was $310.1 million, up 12% year over year.
Fiscal 2021 Highlights
Revenues came in at $14.1 billion, up from $13.57 billion a year ago. Adjusted earnings of $6.29 per share also grew 15% from fiscal 2020. Adjusted EBITDA grew 18% from the year-ago quarter to $1,244 million.
Balance Sheet & Cash Flow
At fiscal 2021-end (Oct 1, 2021), Jacobs had cash and cash equivalents of $1,014.2 million, up from $862.4 million at fiscal 2020-end (Oct 2, 2020). Long-term debt increased to $2.84 billion at fiscal 2021-end from $1.68 billion as of Oct 2, 2020.
The company provided $726.3 million cash for operating activities in fiscal 2021 compared with $806.8 million in the year-ago period. It generated free cash flow of $175.6 million in fourth-quarter fiscal 2021 and $633.5 million in the full year.
Fiscal 2022 Guidance
Jacobs expects adjusted EBITDA between $1,370 million and $1,450 million (depicting growth from $1.1 billion in fiscal 2020). Also, it anticipates adjusted earnings within $6.85-$7.45 per share versus $5.48 per share reported in fiscal 2020.
The company expects adjusted EPS of $10.00 in fiscal 2025. The guidance includes expected benefits to People and Places Solutions from the recently passed Infrastructure Investment and Jobs Act. Jacobs has a robust Critical Mission Solutions sales pipeline and sees sustained growth in PA Consulting.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, Jacobs Engineering has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision looks promising. Notably, Jacobs Engineering has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.