Jacobs Engineering Group Inc. reported second-quarter fiscal 2019 (ended Mar 29, 2019) results, wherein earnings surpassed the Zacks Consensus Estimate by 9.2% but revenues missed the same by 1.4%.
This construction and technical services company’s earnings from continuing operations of $1.19 per share increased 37% year over year. The upsurge was mainly attributable to strong revenues and margins.
Segmental Performance Drives Revenues
In the quarter under review, Jacobs’ revenues totaled $3,091.6 million, reflecting healthy growth of 37% from the year-ago level. The improvement was driven by healthy segmental businesses.
Backlog at the end of the fiscal second quarter was $20.7 billion, increasing 7.5% year over year.
ECR Sale & KeyW Buyout
On Apr 26, Jacobs completed the sale of its Energy, Chemicals and Resources (“ECR”) business unit to Australia’s WorleyParsons Ltd., as it intends to focus more on “highest-margin growth businesses.”
Meanwhile, on Apr 22, Jacobs announced that the company intends to acquire KeyW. This deal is in line with Jacobs' Aerospace, Technology and Nuclear (“ATN”) transformational strategy of delivering innovative and unique, mission-oriented solutions for highly technical and high consequence government priorities. The transaction positions Jacobs as a leader in high-value Government Services.
Segment Details
Jacobs now reports revenues under two segments — Aerospace, Technology and Nuclear (ATN); and Buildings, Infrastructure and Advanced Facilities (BIAF).
Revenues from the Aerospace, Technology and Nuclear segment of $1,059.5 million increased 14.7% year over year and represented 34.3% of its total revenues in the reported quarter. Backlog at the end of the quarter was roughly $7.3 billion, up 1.5% year over year.
Revenues from the Buildings, Infrastructure and Advanced Facilities segment of $2,032.1 million increased 4.4% year over year and accounted for 65.7% of revenues in the quarter under review. Backlog at the end of the quarter was roughly $13.4 billion, up 11.1% year over year.
Margins Profile
In the quarter under review, Jacobs’ adjusted gross profit increased 2% year over year to $613.5 million. Adjusted selling, general and administrative expenses, which declined 8.2% to $391.8 million, represented 12.7% of the total revenues, decreasing from 14.9% recorded a year ago.
Adjusted operating margin expanded 110 basis points to 7.2% in the quarter.
Balance Sheet and Cash Flow
At fiscal second quarter-end, Jacobs’ cash and cash equivalents were $674.5 million, up from $634.9 million at the end of fiscal 2018. Long-term debt balance increased to $2.84 billion at the end of the quarter from $2.14 billion at fiscal 2018-end.
2019 View Up
The company now expects fiscal 2019 pro-forma EPS in the range of $4.45-$4.85 (assuming full-year ECR results), up from prior expectation of $4.40-$4.80. Jacobs continues to expect full-year adjusted EBITDA between $920 million and $1 billion (excluding ECR).
Zacks Rank & Other Stocks to Consider
Jacobs currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks from the Zacks Construction sector include EMCOR Group, Inc. (EME - Free Report) , AECOM (ACM - Free Report) and Quanta Services, Inc. (PWR - Free Report) . While EMCOR sports a Zacks Rank #1, the other two stocks carry a Zacks Rank #2 (Buy). You can the complete list of today’s Zacks #1 Rank stocks here.
EMCOR’s earnings per share are expected to increase 11% in 2019.
AECOM surpassed estimates in all the trailing four quarters, with the average being 3.7%.
Quanta Services has an expected earnings growth rate of 25.3% for 2019.
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(We are reissuing this article to correct a mistake. The original article, issued on May 7, 2019, should no longer be relied upon.)
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Jacobs Engineering Group Inc. reported second-quarter fiscal 2019 (ended Mar 29, 2019) results, wherein earnings surpassed the Zacks Consensus Estimate by 9.2% but revenues missed the same by 1.4%.
This construction and technical services company’s earnings from continuing operations of $1.19 per share increased 37% year over year. The upsurge was mainly attributable to strong revenues and margins.
Segmental Performance Drives Revenues
In the quarter under review, Jacobs’ revenues totaled $3,091.6 million, reflecting healthy growth of 37% from the year-ago level. The improvement was driven by healthy segmental businesses.
Backlog at the end of the fiscal second quarter was $20.7 billion, increasing 7.5% year over year.
ECR Sale & KeyW Buyout
On Apr 26, Jacobs completed the sale of its Energy, Chemicals and Resources (“ECR”) business unit to Australia’s WorleyParsons Ltd., as it intends to focus more on “highest-margin growth businesses.”
Meanwhile, on Apr 22, Jacobs announced that the company intends to acquire KeyW. This deal is in line with Jacobs' Aerospace, Technology and Nuclear (“ATN”) transformational strategy of delivering innovative and unique, mission-oriented solutions for highly technical and high consequence government priorities. The transaction positions Jacobs as a leader in high-value Government Services.
Segment Details
Jacobs now reports revenues under two segments — Aerospace, Technology and Nuclear (ATN); and Buildings, Infrastructure and Advanced Facilities (BIAF).
Revenues from the Aerospace, Technology and Nuclear segment of $1,059.5 million increased 14.7% year over year and represented 34.3% of its total revenues in the reported quarter. Backlog at the end of the quarter was roughly $7.3 billion, up 1.5% year over year.
Revenues from the Buildings, Infrastructure and Advanced Facilities segment of $2,032.1 million increased 4.4% year over year and accounted for 65.7% of revenues in the quarter under review. Backlog at the end of the quarter was roughly $13.4 billion, up 11.1% year over year.
Margins Profile
In the quarter under review, Jacobs’ adjusted gross profit increased 2% year over year to $613.5 million. Adjusted selling, general and administrative expenses, which declined 8.2% to $391.8 million, represented 12.7% of the total revenues, decreasing from 14.9% recorded a year ago.
Adjusted operating margin expanded 110 basis points to 7.2% in the quarter.
Balance Sheet and Cash Flow
At fiscal second quarter-end, Jacobs’ cash and cash equivalents were $674.5 million, up from $634.9 million at the end of fiscal 2018. Long-term debt balance increased to $2.84 billion at the end of the quarter from $2.14 billion at fiscal 2018-end.
2019 View Up
The company now expects fiscal 2019 pro-forma EPS in the range of $4.45-$4.85 (assuming full-year ECR results), up from prior expectation of $4.40-$4.80. Jacobs continues to expect full-year adjusted EBITDA between $920 million and $1 billion (excluding ECR).
Zacks Rank & Other Stocks to Consider
Jacobs currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks from the Zacks Construction sector include EMCOR Group, Inc. (EME - Free Report) , AECOM (ACM - Free Report) and Quanta Services, Inc. (PWR - Free Report) . While EMCOR sports a Zacks Rank #1, the other two stocks carry a Zacks Rank #2 (Buy). You can the complete list of today’s Zacks #1 Rank stocks here.
EMCOR’s earnings per share are expected to increase 11% in 2019.
AECOM surpassed estimates in all the trailing four quarters, with the average being 3.7%.
Quanta Services has an expected earnings growth rate of 25.3% for 2019.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
(We are reissuing this article to correct a mistake. The original article, issued on May 7, 2019, should no longer be relied upon.)
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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