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In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 1.1% but revenues beat the same by 3.4%. On a year-over-year basis, its earnings declined 2.2% but revenues grew 9.4%.
The leading provider of professional, technical and construction services’ earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 1.4%.
Trend in Estimates
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) decreased to $2.02 from $2.03 in the past 30 days. The estimated figure indicates 12.2% growth from $1.80 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $4.14 billion, suggesting 6.6% growth from the year-ago quarter’s reported figure of $3.88 billion.
Jacobs’ fourth-quarter fiscal 2023 revenues are likely to have been aided by investments from the U.S. Infrastructure Act and other economic stimuli. Its strategic focus on transforming itself from an engineering and construction firm to a global technology-forward solutions company is expected to have reflected in the to-be-reported quarter’s numbers. Also, a higher-margin backlog, focus on generating efficiencies through digital and technological solutions and solid project execution are expected to have boosted growth.
J’s continuous shift to digitalization and leadership in strategic end markets like space exploration, life sciences, cyber and water solutions bode well. Again, the U.S. Department of Defense’s increased focus on strategic data utilization is likely to have driven Jacobs’ growth.
A favorable revenue mix in both People & Places Solutions (P&PS) and Critical Mission Solutions (CMS) segments and benefits from PA Consulting (which has a solid accretive gross margin profile of nearly 50%) are likely to get reflected in margins.
Segment-wise, higher spending from the transportation sector and accelerated investments toward drinking water, wastewater, flood protection and climate resilience might have aided the company’s fiscal fourth-quarter performance in the P&PS segment (which accounted for 58% of total revenues in fiscal 2022).
Rapid implementation of digital technologies has been optimizing clients’ operational spending and mitigating revenue challenges. Further, environmental and green economy projects remain strong.
Our model predicts P&PS segment revenues to increase 12.2% year over year to $1,773.4 million in the quarter. P&PS’s operating profit is expected to grow 10.1% to $252.1 million from a year ago.
The CMS segment (36% of total revenues) is expected to have benefited from the consistent performance of the Cyber and Mission-IT business. The company’s CMS strategy has been focused on creating resilient revenue growth and margin expansion by offering technology-enabled solutions aligned to critical national priorities that drive innovative outcomes. Jacobs has been pursuing global energy transition, space-based ISR, intelligence analytics and 5G networks.
Our model predicts the CMS segment’s revenues to be $1,201.4 million, indicating growth from $1,156 million a year ago. The CMS segment’s operating profit is expected to be $98.7 million, up from $81 million a year ago.
Our model predicts a total backlog of $28.83 billion compared with $27.86 billion reported a year ago. The P&PS segment’s backlog is pegged at $17.64 billion, indicating a rise of 3.7% from the year-ago quarter’s figure. The same for CMS is pegged at $7.75 billion, indicating 1.7% year-over-year growth.
The company expects non-allocated corporate costs to get reflected in the quarterly performance due to increased medical costs, IT investments and other expenses. Overall, Jacobs expects fiscal fourth-quarter EPS to show healthy growth year over year.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Jacobs this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, this is not the case here.
Earnings ESP: The company has an Earnings ESP of +0.20%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Jacobs currently carries a Zacks Rank #4 (Sell).
KBR, Inc. (KBR - Free Report) reported mixed third-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same.
KBR's quarterly earnings beat the consensus estimate for the eighth straight quarter. Revenues, on the other hand, surpassed the mark in three of the trailing eight quarters and missed on the remaining five occasions.
Quanta Services Inc. (PWR - Free Report) reported better-than-expected results for third-quarter 2023, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. Both metrics were up on a year-over-year basis.
Quanta continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
Fluor Corporation (FLR - Free Report) reported stellar results for third-quarter 2023, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased from the previous year, given solid demand for its engineering and construction solutions.
Given Fluor's advances on large Energy Solutions projects and continued progress on projects in our legacy portfolio, Fluor lifted its expectations for 2023.
Image: Bigstock
Jacobs (J) to Report Q4 Earnings: What's in the Offing?
Jacobs Engineering Group Inc. (J - Free Report) is slated to report fourth-quarter fiscal 2023 results on Nov 21, before market open.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 1.1% but revenues beat the same by 3.4%. On a year-over-year basis, its earnings declined 2.2% but revenues grew 9.4%.
The leading provider of professional, technical and construction services’ earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 1.4%.
Trend in Estimates
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) decreased to $2.02 from $2.03 in the past 30 days. The estimated figure indicates 12.2% growth from $1.80 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $4.14 billion, suggesting 6.6% growth from the year-ago quarter’s reported figure of $3.88 billion.
Jacobs Solutions Inc. Price and EPS Surprise
Jacobs Solutions Inc. price-eps-surprise | Jacobs Solutions Inc. Quote
Factors to Note
Jacobs’ fourth-quarter fiscal 2023 revenues are likely to have been aided by investments from the U.S. Infrastructure Act and other economic stimuli. Its strategic focus on transforming itself from an engineering and construction firm to a global technology-forward solutions company is expected to have reflected in the to-be-reported quarter’s numbers. Also, a higher-margin backlog, focus on generating efficiencies through digital and technological solutions and solid project execution are expected to have boosted growth.
J’s continuous shift to digitalization and leadership in strategic end markets like space exploration, life sciences, cyber and water solutions bode well. Again, the U.S. Department of Defense’s increased focus on strategic data utilization is likely to have driven Jacobs’ growth.
A favorable revenue mix in both People & Places Solutions (P&PS) and Critical Mission Solutions (CMS) segments and benefits from PA Consulting (which has a solid accretive gross margin profile of nearly 50%) are likely to get reflected in margins.
Segment-wise, higher spending from the transportation sector and accelerated investments toward drinking water, wastewater, flood protection and climate resilience might have aided the company’s fiscal fourth-quarter performance in the P&PS segment (which accounted for 58% of total revenues in fiscal 2022).
Rapid implementation of digital technologies has been optimizing clients’ operational spending and mitigating revenue challenges. Further, environmental and green economy projects remain strong.
Our model predicts P&PS segment revenues to increase 12.2% year over year to $1,773.4 million in the quarter. P&PS’s operating profit is expected to grow 10.1% to $252.1 million from a year ago.
The CMS segment (36% of total revenues) is expected to have benefited from the consistent performance of the Cyber and Mission-IT business. The company’s CMS strategy has been focused on creating resilient revenue growth and margin expansion by offering technology-enabled solutions aligned to critical national priorities that drive innovative outcomes. Jacobs has been pursuing global energy transition, space-based ISR, intelligence analytics and 5G networks.
Our model predicts the CMS segment’s revenues to be $1,201.4 million, indicating growth from $1,156 million a year ago. The CMS segment’s operating profit is expected to be $98.7 million, up from $81 million a year ago.
Our model predicts a total backlog of $28.83 billion compared with $27.86 billion reported a year ago. The P&PS segment’s backlog is pegged at $17.64 billion, indicating a rise of 3.7% from the year-ago quarter’s figure. The same for CMS is pegged at $7.75 billion, indicating 1.7% year-over-year growth.
The company expects non-allocated corporate costs to get reflected in the quarterly performance due to increased medical costs, IT investments and other expenses. Overall, Jacobs expects fiscal fourth-quarter EPS to show healthy growth year over year.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Jacobs this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, this is not the case here.
Earnings ESP: The company has an Earnings ESP of +0.20%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Jacobs currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Releases
KBR, Inc. (KBR - Free Report) reported mixed third-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same.
KBR's quarterly earnings beat the consensus estimate for the eighth straight quarter. Revenues, on the other hand, surpassed the mark in three of the trailing eight quarters and missed on the remaining five occasions.
Quanta Services Inc. (PWR - Free Report) reported better-than-expected results for third-quarter 2023, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. Both metrics were up on a year-over-year basis.
Quanta continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
Fluor Corporation (FLR - Free Report) reported stellar results for third-quarter 2023, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased from the previous year, given solid demand for its engineering and construction solutions.
Given Fluor's advances on large Energy Solutions projects and continued progress on projects in our legacy portfolio, Fluor lifted its expectations for 2023.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.