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Jacobs (J) Recieves 5-Year Contract From U.S. Army Worth $101M

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Jacobs Engineering Group Inc. (J - Free Report) recently received a task-order contract for IT support services of critical networks from the U.S. Army Intelligence, Security Command (INSCOM), Ground Intelligence Support Activity (GISA) and Enterprise Transport (GET). The five-year task order contract is valued at $101 million.

Per the contract, the company will be assisting with a full range of sustainment and technical support services in a bid to provide uninterrupted service to the U.S. Army, Marines, Special Operations Forces, National Guard Bureau (NGB) and the NGB Civil Support Teams customers in and outside the continental United States. Jacobs will also provide access to all hardware and software supporting both classified and unclassified networks.

Critical mission solutions senior vice president of advancing national security Jennifer Richmond said “As the potential threats to our national security are ever evolving, so too are the mission needs of our defense and intelligence community partners. At Jacobs, we're harnessing our unique blend of mission experience, digital capability and targeted innovation to advance digital modernization across our U.S. federal clients as we anticipate and meet the national security challenges of the future.”

Jacobs’ business has been gaining strength on the back of solid contract wins. Recently, the company received multiple contracts from the Jacksonville Port Authority (“JAXPORT”) to support the expansion of Florida’s largest container port. Per these contracts, the company will provide civil, structural and marine engineering consulting and design services for the JAXPORT. Each contract spans three years with an option of renewal for two additional one-year periods.

CMS Segment: A Key Catalyst

The CMS business has been demonstrating resiliency and alignment to the diverse set of high-value sectors it serves, such as national security, space exploration, intelligence, nuclear life cycle solutions and deployment of 5G infrastructure.

Jacobs is benefiting major government customers across the Department of Defense, Department of Energy, intelligence community and NASA. The company derived 33% of fiscal 2020 total revenues, directly or indirectly, from agencies of the U.S. federal government. Meanwhile, within its commercial markets (which made up 8% of CMS' fiscal 2020 revenues), the 5G wireless build-out continues to present robust prospects.

Jacobs’ focus on long-term mission-critical enterprise contracts bodes well. Meanwhile, within CMS, demand for Jacobs’ IT and cybersecurity solutions, and nuclear projects has witnessed increased demand from its international customers, which accounted for 13% of fiscal 2020 revenues. It is worth mentioning that the U.K. Ministry of Defence, on of its clients, continues to focus on accelerating its strategic innovative and technology focused initiatives. Overall, it has a robust pipeline of more than $30 billion through 2021. These positives will continue to drive Jacobs’ bottom line in the upcoming quarters.

Shares of Jacobs have gained 24.8% in the past six months, compared with the industry’s rally of 36.8%.

Zacks Rank

Jacobs — which shares space with Quanta Services, Inc. (PWR - Free Report) , AECOM (ACM - Free Report) and KBR, Inc. (KBR - Free Report) in the same industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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