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Jacobs (J) Partners NNB Genco to Aid Hinkley Point C Project

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Jacobs Engineering Group Inc. (J - Free Report) has partnered with NNB Generation Company (HPC) Ltd (NNB Genco) for the latter’s Somerset, U.K-based Hinkley Point C nuclear power station.

Since inception, Jacobs has been supporting the Hinkley Point C project. Notably, it will continue supporting licensing and permitting applications to U.K. regulators as well as acting as the delivery partner for program, project and construction management services on the earthworks, main civil works, marine works, and heat sink systems.

Also, the company provides a variety of specialist engineering and technical services. Importantly, Jacobs' Inspection Validation Centre in Warrington, U.K. is the project's sole supplier of independent assessment and assurance for all aspects of non-destructive testing inspection qualification.

Moreover, till the station is commissioned and confirms Jacobs' status as a preferred supplier in agreed areas of scope and support, the company will remain a strategic partner on this $30-billion project.

Jacobs’ Critical Mission Solutions’ (CMS) International Senior Vice President, Clive White, said "This project is critical for the U.K. to meet its net-zero carbon commitments."

Growth Drivers

Jacobs is majorly benefiting from Federal & Environmental Solutions, and the CMS business. Federal solutions lend support to U.S. federal, public sector, private sector and defense contractors. The company’s CMS unit serves global automotive, aerospace, telecommunications, defense, and nuclear clients as well as the U.S. intelligence community.

In fiscal 2020, 79% of CMS’ revenues were earned by Jacobs from serving the U.S. Department of Defence, Intelligence Community and civil governmental entities. In fiscal 2020, 8% of CMS’ revenues were generated from various U.S. commercial sectors. CMS backlog grew 7% year over year and 6% on a pro-forma basis to $9.8 billion for the fiscal second quarter, which provided a strong visibility into the base business.

Also, efficient project execution has been one of the main factors driving Jacobs’ performance for the last few quarters. The company’s ongoing contract wins are an evidence of the fact. Recently, the CMS business received a four-year contract from the Nuclear Decommissioning Authority (“NDA”) in the U.K. to facilitate asset management solutions. Per the contract, Jacobs and its strategic supplier, PA Consulting, will assist the NDA on the asset management plan’s execution. They will incorporate new digital decision-making tools to enhance efficiency and reduce operational costs on nuclear-licensed sites in the NDA estate.

 

Share Performance

Jacobs’ shares have gained 18.3% over the past three months compared with the industry’s 14.7% rally. Earnings estimates for 2021 have moved 0.7% upward in the past seven days, depicting analysts’ optimism regarding the company’s growth potential. The upward trend is attributable to its persistent focus on shifting toward digitization and leadership in strategic end markets. Also, the company’s inorganic strategies and solid backlog are likely to drive near-term results.

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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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