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Jacobs (JEC) Wins 6-Year Contract From Highways England

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Jacobs Engineering Group Inc. recently clinched a six-year contract from Highways England to support its delivery partnership framework. Jacobs will support Highways England in creating a modern tactical road network ensuring safety and efficiency of work to enhance travelers’ experience.

Meanwhile, Jacobs received contract to work in both the North and East regions. The company, in partnership with Costain will develop, design and construct capital road projects that are part of the Regional Investment Programme during Road Period 1 (2015-2020) and Road Period 2 (2020-2025).

The move highlights Jacob’s strong regional relationships and expertise in designing and planning projects. In fact, the company has been supporting Highways England's National Infrastructure and Regional Investment Programs and its Smart Motorway Programme along with programs for Transport Scotland and the Welsh Government in the U.K.

Rationale Behind

The contract win is reflective of Jacob’s ability to execute different projects in the most efficient manner. It also highlights the company’s efforts to earn high-end and differentiated Buildings, Infrastructure and Advanced Facilities (BIAF) deals.

Meanwhile, the BIAF segment accounted for more than 41% of total revenues in fiscal 2018. In the fourth quarter of 2018, revenues at the segment increased 67.6% year over year. Backlog at the end of the quarter inched up 67.6%.

Jacobs leads the global professional services sector, providing solutions for a sustainable environment. It offers a broad array of services, including scientific, technical, professional and construction. It also efficiently manages business programs for industrial, commercial, government and infrastructure sectors. Owing to its leading position, the company recorded $15 billion revenues in fiscal 2018 and the upward trend in revenues is likely to continue.  




Meanwhile, shares of the company have declined 12.1% comparing favorably with the industry’s decline of 27.4%. While the Zacks Consensus Estimate calls for 2019 revenues of $16.7 billion, earnings estimate for 2019 is pegged at $5.15, marking an increase of 15.2% year over year.

Zacks Rank & Stocks to Consider

Jacobs carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Construction sector are KBR, Inc. (KBR - Free Report) , EMCOR Group, Inc. (EME - Free Report) and Altair Engineering Inc. (ALTR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

KBR surpassed earnings estimates in three of the past four quarters, the average positive surprise being 12.6%.

EMCOR Group’s expected earnings growth rate for the current year is 20%.

Altair Engineering has an expected earnings growth rate of 23.1% for the current year.

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