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TC Energy Corporation (TRP) - free report >>
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Jacobs (JEC) to Boost Energy Business on TransCanada Deal
Renowned technical services company, Jacobs Engineering Group Inc. lately inked a three-year deal with the premium North American energy infrastructure company, TransCanada Corporation (TRP - Free Report) . The deal is expected to reinforce Jacob’s energy business in the near term.
As per TransCanada’s master engineering service deal, Jacobs would be providing its unique drafting, designing, engineering, project management, field & technical support services for TransCanada’s liquids and pipelines facilities projects across Canada.
Moving Forward
Weak energy resource prices have forced energy infrastructure companies to trim or postpone their investments in recent times. Such major negative externality is hurting Jacobs’ energy business revenues. In third-quarter fiscal 2016, the company’s Petroleum & Chemicals segment’s sales plunged 22.1% year over year.
At this juncture, we believe that the new contract secured by TransCanada would help offset Jacobs’ depressed energy sector business to some extent. This deal will help the technical services company to capture demand from new energy infrastructure clients and thus, expand its energy sector market share in the global forum.
Share Price and Zacks Rank
Jacobs' share price stood at $54.11 as of Aug 24, 2016. We expect the aforesaid announcement to result in stock price movement in the near term.
JACOBS ENGIN GR Price
JACOBS ENGIN GR Price | JACOBS ENGIN GR Quote
Jacobs currently carries a Zacks Rank #3 (Hold). The company remains on track to boost its financials via new contracts, improved backlogs, greater operational efficiency and increased innovations. However, headwinds like a strong U.S. dollar, intense competition and dismal pricing environment in the global mining and energy market raise concerns.
Stocks to Consider
Some well-ranked stocks in the industry include Willdan Group, Inc. (WLDN - Free Report) and Boise Cascade Company (BCC - Free Report) . Both the companies currently hold a Zacks Rank #2 (Buy).
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