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Jacobs (J) to Serve U.S. Army's West Desert Test Center

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Jacobs Engineering Group Inc. (J - Free Report) recently received a contract to provide assistance to the West Desert Test Center (WDTC) at Dugway Proving Ground (DPG), UT. The DPG contract is valued at more than $60 million and is likely to be completed within a period of five years.

DPG is the nation's leading test center for chemical and biological defense capabilities. The DPG West Desert Test Center is the chosen U.S. Army Major Range and Test Facility Base for chemical and biological defense testing.

Per the agreement, Jacobs will work as a subject matter expert and will provide technical and operational support across chemical, biological, radiological, nuclear and high-yield explosive (CBRNE) defence mission. The work involves field range testing for the detection and defeat of biochemical and radiological agents and pollutants. It will also carry out laboratory testing and assessment of technology, tools and systems to find weapons of mass destruction.

The work also includes analysing the functionality of field-deployable detection, diffusion and fumigation systems with war-fighter personal protective equipment, field deployment and testing of wireless communications systems, technologize data collection in critical CBRNE incident territory etc. Also, Jacobs will enable the execution of CBRNE incident training and constructive field exercises for all military branches, civilian first-responder teams and allied foreign partners.

In this regard, Senior Vice President of Advancing National Security Defense of Jacobs Critical Mission Solutions (“CMS”), said, Jennifer Richmond, “As the proliferation of potential threats unfortunately accelerates at pace with technology advancement, the CBRNE defense mission has never been more relevant and important to the world.”

CMS Prospects & Jacobs’ Price Performance

The company’s Critical Mission Solutions or 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’ revenues were earned from serving the U.S. Department of Defence, 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.

During September 2020, Jacobs completed the acquisition of Wood Nuclear Business, thereby enhancing Jacobs' credentials as a global leader of total lifecycle nuclear services and technology-enabled solutions, providing strategic support to clients' mission-critical defense and clean energy priorities, nuclear clean-up and decommissioning, environmental restoration and operational support.

Jacobs’ shares have gained 32.3% the industry's over the past six months compared with the industry’s 56.6% rally. Although the company’s shares have underperformed its industry for the said period, earnings estimates for fiscal 2021 have moved up 0.7% in the past 30 days, depicting analysts' optimism over its bottom-line growth potential. This optimism is mainly attributable to the company’s 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 — 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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