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Jacobs (J) Beats on Q2 Earnings & Revenues, to Spin Off CMS Unit
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Jacobs Engineering Group Inc. (J - Free Report) reported second-quarter fiscal 2023 (ended Mar 31, 2023) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate and rising year over year. The results reflect solid performance across the portfolio, led by People and Places Solutions operating profit growth of 21% year over year.
Importantly, the company announced its intent to separate the Critical Mission Solutions (“CMS”) business. This marks one of its strategic portfolio transformation initiatives to create higher growth and margin business portfolio focused on critical infrastructure and sustainability. Jacobs expects to complete the transaction in the second half of fiscal 2024.
Shares of this construction and technical services company gained 1% following the earnings release on May 9, 2023.
Looking into fiscal 2023 and beyond, Jacobs' president and CFO Kevin Berryman highlighted, “We continue to see increasing momentum in critical infrastructure, including water, transportation and sustainability. Our strong financial position and re-affirmed full-year cash flow guidance will allow us to continue to re-invest behind our accelerators while managing a disciplined capital allocation strategy."
Jacobs Solutions Inc. Price, Consensus and EPS Surprise
For the reported quarter, adjusted earnings of $1.81 per share topped the consensus estimate of $1.78. Also, the reported figure was up 5% from the year-ago period.
Jacobs’ revenues totaled $4.1 billion, which topped the consensus mark of $4 billion and grew 6.4% year over year. Net revenues were up 5.2% year over year and up 8% in constant currency.
Backlog at the end of second-quarter fiscal 2023 amounted to $29 billion, up 4% from a year ago.
Segment Details
Revenues from the CMS segment of $1.19 billion increased 5% year over year. Yet, the segment operating profit of $93.9 million was down from $94.6 million reported a year ago. The backlog at the fiscal second-quarter end was $8.14 billion, up from $7.51 billion a year ago.
Revenues from the People & Places Solutions or P&PS segment totaled $2.35 billion, which inched up 8.4% year over year. Net revenues (excluding Pass Through Revenue) were up 7.3% year over year. Segment operating profit grew 20.5% from the prior-year quarter to $232.2 million. The backlog at the quarter end was $17.6 billion, up from $16.9 billion a year ago.
Revenues from the Divergent Solutions segment totaled $241.2 million, which grew 0.8% year over year. Divergent Solutions net revenues were down 2.8% year over year. Segment operating profit improved 45.8% from the prior-year quarter to $24.9 million. The backlog at the quarter end was $3 billion, down from $3.1 billion a year ago.
PA Consulting generated $301 million in revenues in the fiscal second quarter, up from the year-ago quarter’s figure of $294.4 million. Segment operating profit was $65.6 million, down from $68.3 million a year ago. Quarter-end backlog amounted to $319 million, up from $269 million a year ago.
Margins Profile
Total segment operating profit grew to $416.6 million from $372.7 million a year ago.
Balance Sheet & Cash Flow
At the fiscal second-quarter end, Jacobs had cash and cash equivalents of $1,223.3 million, up from $1,140.5 million at the fiscal 2022-end (Sep 30, 2022). Long-term debt slightly increased to $3.4 billion at the fiscal second-quarter end from $3.36 billion at the fiscal 2022-end.
Net cash provided by operating activities totaled $132 million in the quarter compared with $124.6 million in the year-ago quarter.
Fiscal 2023 Guidance Narrowed
Meanwhile, Jacobs now expects adjusted EBITDA between $1,420 million and $1,470 million and adjusted earnings within $7.25-$7.45 per share. Earlier, the company had expected adjusted EBITDA between $1,400 million and $1,480 million and adjusted earnings within $7.20-$7.50 per share.
The Zacks Consensus Estimate for the company’s fiscal 2023 earnings is currently pegged at $7.37 per share.
Quanta Services Inc. (PWR - Free Report) reported better-than-expected results for first-quarter 2023, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate.
The company continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Notably, project activities associated with renewable generation have been going strong and are expected to continue throughout the year.
KBR, Inc. (KBR - Free Report) reported strong results in first-quarter 2023, where earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.
KBR’s top and bottom lines gained on strong underlying growth and margin expansion as well as excellent bookings in the reported quarter.
Fluor Corporation (FLR - Free Report) reported mixed results for first-quarter 2023. Earnings missed the Zacks Consensus Estimate but increased from the previous year. Revenues surpassed the consensus mark and grew from the year-ago level.
FLR’s underlying performance continues to be impacted by a few remaining legacy projects.
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Jacobs (J) Beats on Q2 Earnings & Revenues, to Spin Off CMS Unit
Jacobs Engineering Group Inc. (J - Free Report) reported second-quarter fiscal 2023 (ended Mar 31, 2023) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate and rising year over year. The results reflect solid performance across the portfolio, led by People and Places Solutions operating profit growth of 21% year over year.
Importantly, the company announced its intent to separate the Critical Mission Solutions (“CMS”) business. This marks one of its strategic portfolio transformation initiatives to create higher growth and margin business portfolio focused on critical infrastructure and sustainability. Jacobs expects to complete the transaction in the second half of fiscal 2024.
Shares of this construction and technical services company gained 1% following the earnings release on May 9, 2023.
Looking into fiscal 2023 and beyond, Jacobs' president and CFO Kevin Berryman highlighted, “We continue to see increasing momentum in critical infrastructure, including water, transportation and sustainability. Our strong financial position and re-affirmed full-year cash flow guidance will allow us to continue to re-invest behind our accelerators while managing a disciplined capital allocation strategy."
Jacobs Solutions Inc. Price, Consensus and EPS Surprise
Jacobs Solutions Inc. price-consensus-eps-surprise-chart | Jacobs Solutions Inc. Quote
Earnings & Revenue Discussion
For the reported quarter, adjusted earnings of $1.81 per share topped the consensus estimate of $1.78. Also, the reported figure was up 5% from the year-ago period.
Jacobs’ revenues totaled $4.1 billion, which topped the consensus mark of $4 billion and grew 6.4% year over year. Net revenues were up 5.2% year over year and up 8% in constant currency.
Backlog at the end of second-quarter fiscal 2023 amounted to $29 billion, up 4% from a year ago.
Segment Details
Revenues from the CMS segment of $1.19 billion increased 5% year over year. Yet, the segment operating profit of $93.9 million was down from $94.6 million reported a year ago. The backlog at the fiscal second-quarter end was $8.14 billion, up from $7.51 billion a year ago.
Revenues from the People & Places Solutions or P&PS segment totaled $2.35 billion, which inched up 8.4% year over year. Net revenues (excluding Pass Through Revenue) were up 7.3% year over year. Segment operating profit grew 20.5% from the prior-year quarter to $232.2 million. The backlog at the quarter end was $17.6 billion, up from $16.9 billion a year ago.
Revenues from the Divergent Solutions segment totaled $241.2 million, which grew 0.8% year over year. Divergent Solutions net revenues were down 2.8% year over year. Segment operating profit improved 45.8% from the prior-year quarter to $24.9 million. The backlog at the quarter end was $3 billion, down from $3.1 billion a year ago.
PA Consulting generated $301 million in revenues in the fiscal second quarter, up from the year-ago quarter’s figure of $294.4 million. Segment operating profit was $65.6 million, down from $68.3 million a year ago. Quarter-end backlog amounted to $319 million, up from $269 million a year ago.
Margins Profile
Total segment operating profit grew to $416.6 million from $372.7 million a year ago.
Balance Sheet & Cash Flow
At the fiscal second-quarter end, Jacobs had cash and cash equivalents of $1,223.3 million, up from $1,140.5 million at the fiscal 2022-end (Sep 30, 2022). Long-term debt slightly increased to $3.4 billion at the fiscal second-quarter end from $3.36 billion at the fiscal 2022-end.
Net cash provided by operating activities totaled $132 million in the quarter compared with $124.6 million in the year-ago quarter.
Fiscal 2023 Guidance Narrowed
Meanwhile, Jacobs now expects adjusted EBITDA between $1,420 million and $1,470 million and adjusted earnings within $7.25-$7.45 per share. Earlier, the company had expected adjusted EBITDA between $1,400 million and $1,480 million and adjusted earnings within $7.20-$7.50 per share.
The Zacks Consensus Estimate for the company’s fiscal 2023 earnings is currently pegged at $7.37 per share.
Zacks Rank
Jacobs currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some Recent Releases
Quanta Services Inc. (PWR - Free Report) reported better-than-expected results for first-quarter 2023, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate.
The company continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Notably, project activities associated with renewable generation have been going strong and are expected to continue throughout the year.
KBR, Inc. (KBR - Free Report) reported strong results in first-quarter 2023, where earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.
KBR’s top and bottom lines gained on strong underlying growth and margin expansion as well as excellent bookings in the reported quarter.
Fluor Corporation (FLR - Free Report) reported mixed results for first-quarter 2023. Earnings missed the Zacks Consensus Estimate but increased from the previous year. Revenues surpassed the consensus mark and grew from the year-ago level.
FLR’s underlying performance continues to be impacted by a few remaining legacy projects.