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Construction services provider, Jacobs Engineering Group Inc. (JEC - Analyst Report) reported modest fiscal second-quarter 2013 (ended Mar 29, 2013) financial results. Although the figures were up on a year-over-year basis, both earnings and revenues lagged the Zacks Consensus Estimate.

The company reported second-quarter earnings per share of 80 cents, 2.4% lower than the Zacks Consensus Estimate of 82 cents. The quarterly earnings improved 23.1% from the year-ago earnings of 65 cents a share due to improvement in revenues as well as margins.

Revenues: Revenues increased 4.9% year over year to $2.83 billion in the reported quarter. However, it fell short of the Zacks Consensus Estimate of $2.94 billion by 3.6%. Technical Professional Services revenues came in at $1.69 billion, compared with $1.65 billion in the year-ago quarter. Field Services revenues in the reported quarter was $1.14 billion, compared with $1.05 billion in the second quarter of fiscal 2012.

Costs/Margin: During the reported quarter, direct costs of contracts, a major expenditure for Jacobs, edged up 4.1% from the year-ago quarter to settle at $2.37 billion. Selling, general and administrative (SG&A) expenses came in at $299.7 million, up 2.3% year over year.

Operating margin reached 5.8%, increasing 90 basis points from the year-ago quarter.

Backlog: Exiting the quarter, backlog stood at $16.79 billion, an increase of 11.2% from $15.09 billion in the year-ago quarter. It includes backlog from Technical Professional Services of $10.89 billion versus $9.90 billion at the end of the second quarter of fiscal 2012, with the remainder coming from Field Services.

Balance Sheet: Jacobs’ cash and cash equivalents at the end of fiscal second quarter were approximately $1.17 billion, declining from $1.24 recorded at the end of the previous quarter. Total debt decreased 13.0% sequentially to $450.8 million as of Mar 29, 2013.

Outlook: Jacobs reaffirmed its earnings expectations for fiscal 2013 to range between $3.00 and $3.50 per share. Management also sees ample opportunities to increase market share with significant improvement in the end markets.

Jacobs currently carries a Zacks Rank #2 (Buy). Other stocks to watch out for in the engineering industry are Fluor Corporation (FLR - Analyst Report), carrying a Zacks Rank #1 (Strong Buy), as well as AECOM Technology Corporation (ACM - Analyst Report) and Harris & Harris Group, Inc. , which carry a Zacks Rank #2 (Buy).

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