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Jacobs Engineering (J) Down 2.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Jacobs Engineering (J - Free Report) . Shares have lost about 2.5% in that time frame, outperforming 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 drivers.
Jacobs Engineering Group Inc. reported second-quarter fiscal 2021 (ended Apr 1, 2022) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate and rising year over year.
In connection with the earnings release, the company’s chair and CEO Steve Demetriou stated, "We are seeing accelerating demand across all end markets, with incremental opportunities to scale in the areas of Climate Response, Consulting & Advisory and Data Solutions. These compelling opportunities are reflected in our results with strong bookings performance during the first half of the fiscal year and 9% backlog growth in the second quarter, which positions us well for the remainder of fiscal 2022."
Earnings & Revenue Discussion
For the reported quarter, adjusted earnings of $1.72 per share topped the consensus estimate of $1.70 by 1.2%. Also, the figure was up 3.6% from the year-ago period.
Jacobs’ revenues totaled $3.83 billion, which topped the consensus mark of $3.77 billion by 1.8% and grew 8.1% year over year. Net revenues improved 10.1% year over year, backed by growth across all lines of business and double-digit organic growth for PA Consulting.
Backlog at fiscal second quarter-end amounted to $27.8 billion, up 8.7% from a year ago.
Segment Details
Revenues from the CMS segment of $1.37 billion increased 4.3% year over year. Yet, segment operating profit of $113.2 million was marginally down from $113.8 million reported a year ago. Backlog at quarter-end was $10.5 billion, up from $9.78 billion a year ago.
Revenues from the P&PS segment totaled $2.17 billion, which inched up 1.4% year over year. Yet, segment operating profit declined 5.4% from the prior-year quarter to $191.4 million. Backlog at quarter-end was $16.96 billion, up from $15.5 billion a year ago.
PA Consulting generated $297.4 million in revenues in the fiscal second quarter, up 202.5% from the year-ago quarter’s figure of $98.3 million. Segment operating profit was $68.3 million, up 144.8% from the prior-year quarter’s levels. Quarter-end backlog amounted to $269 million, down from $280 million a year ago.
Margins Profile
For the quarter under review, adjusted gross profit increased to $870.4 million from the year-ago level of $767.2 million. Adjusted operating margin contracted to 10.1% from 10.5% in the prior-year quarter.
Balance Sheet & Cash Flow
At the fiscal second quarter-end, Jacobs had cash and cash equivalents of $1,235.4 million, up from $1,014.2 million at the fiscal 2021-end (Oct 1, 2021). Long-term debt increased to $3.2 billion at the fiscal second quarter-end from $2.84 billion as of Oct 1, 2021.
Net cash provided by operating activities totaled $124.6 million in the quarter compared with $237.6 million in the year-ago quarter.
Fiscal 2022 Guidance Narrowed
Jacobs now expects adjusted EBITDA between $1,385 million and $1,435 million from the prior expectation of $1,370-$1,450 million. It now anticipates adjusted earnings within $6.95-$7.35 per share, narrower from $6.85 to $7.45 projected earlier.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Jacobs Engineering has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 upward for the stock, and the magnitude of these revisions 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 2.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Jacobs Engineering (J - Free Report) . Shares have lost about 2.5% in that time frame, outperforming 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 drivers.
Jacobs Tops Q2 Earnings & Revenue Estimates, Update View
Jacobs Engineering Group Inc. reported second-quarter fiscal 2021 (ended Apr 1, 2022) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate and rising year over year.
In connection with the earnings release, the company’s chair and CEO Steve Demetriou stated, "We are seeing accelerating demand across all end markets, with incremental opportunities to scale in the areas of Climate Response, Consulting & Advisory and Data Solutions. These compelling opportunities are reflected in our results with strong bookings performance during the first half of the fiscal year and 9% backlog growth in the second quarter, which positions us well for the remainder of fiscal 2022."
Earnings & Revenue Discussion
For the reported quarter, adjusted earnings of $1.72 per share topped the consensus estimate of $1.70 by 1.2%. Also, the figure was up 3.6% from the year-ago period.
Jacobs’ revenues totaled $3.83 billion, which topped the consensus mark of $3.77 billion by 1.8% and grew 8.1% year over year. Net revenues improved 10.1% year over year, backed by growth across all lines of business and double-digit organic growth for PA Consulting.
Backlog at fiscal second quarter-end amounted to $27.8 billion, up 8.7% from a year ago.
Segment Details
Revenues from the CMS segment of $1.37 billion increased 4.3% year over year. Yet, segment operating profit of $113.2 million was marginally down from $113.8 million reported a year ago. Backlog at quarter-end was $10.5 billion, up from $9.78 billion a year ago.
Revenues from the P&PS segment totaled $2.17 billion, which inched up 1.4% year over year. Yet, segment operating profit declined 5.4% from the prior-year quarter to $191.4 million. Backlog at quarter-end was $16.96 billion, up from $15.5 billion a year ago.
PA Consulting generated $297.4 million in revenues in the fiscal second quarter, up 202.5% from the year-ago quarter’s figure of $98.3 million. Segment operating profit was $68.3 million, up 144.8% from the prior-year quarter’s levels. Quarter-end backlog amounted to $269 million, down from $280 million a year ago.
Margins Profile
For the quarter under review, adjusted gross profit increased to $870.4 million from the year-ago level of $767.2 million. Adjusted operating margin contracted to 10.1% from 10.5% in the prior-year quarter.
Balance Sheet & Cash Flow
At the fiscal second quarter-end, Jacobs had cash and cash equivalents of $1,235.4 million, up from $1,014.2 million at the fiscal 2021-end (Oct 1, 2021). Long-term debt increased to $3.2 billion at the fiscal second quarter-end from $2.84 billion as of Oct 1, 2021.
Net cash provided by operating activities totaled $124.6 million in the quarter compared with $237.6 million in the year-ago quarter.
Fiscal 2022 Guidance Narrowed
Jacobs now expects adjusted EBITDA between $1,385 million and $1,435 million from the prior expectation of $1,370-$1,450 million. It now anticipates adjusted earnings within $6.95-$7.35 per share, narrower from $6.85 to $7.45 projected earlier.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Jacobs Engineering has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 upward for the stock, and the magnitude of these revisions 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.