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Jacobs (J) to Lead Design Team for Nuclear Clean-ups in Scotland

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Jacobs Engineering Group Inc. (J - Free Report) has secured a deal to serve Dounreay Site Restoration Ltd (DSRL), the site decommissioning company. Jacobs will pilot a team for one of the world’s deepest nuclear clean-ups. It will systemize the plan to move and manage the radioactive wastes and scraps that are stored in the shaft and silo at Dounreay, near Thurso, in Scotland.

The Dounreay shaft is 214.5 feet underground and 15 feet wide, while the silo is a huge underground vault with a solid covering. Both of these were used for storing waste in the 1960s and 1970s.

The owner, DSRL, estimates the cost of this contract at $10.4 million. The project is likely to be completed within 6.5 years. Also, the project has the potential for additional work packages, which in turn will generate more revenues.

Senior Vice President of Jacobs Critical Mission Solutions (CMS) International, Clive White, said, “This work aims to bring about tangible progress toward the clean-up of Dounreay.”

CMS Prospects & Jacobs Share Performance

The company’s CMS (representing 36.6% of fiscal 2020 total revenues) serves global automotive, aerospace, telecommunications, defense, and nuclear clients, as well as the intelligence community of the United States. In fiscal 2020, 79% of CMS’s revenues were earned from serving the DoD, Intelligence Community and civil governmental entities. Notably, in fiscal 2020, 8% of CMS’s revenues were generated from various U.S. commercial sectors. CMS backlog grew 14% year over year and 4% on a pro-forma basis to $9.7 billion for the fiscal first quarter, which provided a strong visibility into the base business.

Jacobs’ shares have gained 22.7% the industry over the past six months compared with the industry’s 46.4% rally. The price performance was backed by an impressive earnings surprise history. The company surpassed earnings estimates in 10 of the trailing 12 quarters. The trend is expected to continue beyond 2021 owing to its improved segmental performances, solid backlog, acquisitions and efforts to focus on high-value business.

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 Zacks Engineering - R and D Services 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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