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Jacobs (J) to Modernize Auckland's Rail Network, Boost Backlog

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Jacobs Engineering Group Inc. (J - Free Report) has nabbed two contracts from KiwiRail, New Zealand's rail network owner and operator, ahead of the opening of Auckland's largest ever transport infrastructure project, the City Rail Link. Jacobs is set to modernize Auckland's rail network as part of KiwiRail's Auckland Metro Rail Programme.

Per the first contract, Jacobs will act as lead designer for the Wiri to Quay Park project. The company will provide multi discipline engineering and architectural professional services.

For the second one, Jacobs will provide design and construction services for the Papakura to Pukekohe Rail Electrification project in association with John Holland, McConnell Dowell and Novare. The contract entitles Jacobs to provide detailed design services and management, surveillance as well as quality assurance services during the construction phase. This Pukekohe Rail Electrification project comprises the electrification of 11.8 miles of track and construction of two additional platforms at Pukekohe station.

Continuous Contract Wins: a Major Boon

This Zacks Rank #2 (Buy) company has been on a contract wining spree of late. Recently, Jacobs, along with North Wind Portage Inc., has won a 10-year contract for the U.S. Department of Energy or DOE's Idaho Cleanup project. Under this indefinite-delivery/indefinite-quantity contract valued at $6.4 billion, the companies will accomplish nuclear waste cleanup and storage at the U.S. Energy Department or DOE’s Idaho National Laboratory Site. Contract work involves integrated waste treatment unit operations, spent nuclear fuel management, waste disposition, facility decontamination and decommissioning, environmental remediation along with facility infrastructure support services.

Also, Jacobs secured an engineering service contract last month to serve U.S. Army Corps of Engineers’ Mobile District Military Design and Construction Program. Also, it received a four-year contract from the Nuclear Decommissioning Authority in the U.K. to facilitate asset management solutions.

Efficient project execution has been one of the main characteristics driving Jacobs’ performance over the last few quarters. The company’s ongoing contract wins are a testimony to the fact. During the fiscal second quarter, its backlog of $15.5 billion was up 9.6% year over year. This reflects persistent solid demand for the company’s consulting services.

Zacks Investment ResearchImage Source: Zacks Investment Research

Shares of Jacobs have advanced 30.1% year to date, in line with the Zacks Engineering - R and D Services industry’s rally. Earnings estimates for the current fiscal year have increased 5.2% over the past 30 days to $6.12 per share, indicating 11.7% year-over-year growth. This ensures impressive growth visibility. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Key Picks

Other top-ranked stocks in the same space include Atlas Technical Consultants, Inc. (ATCX - Free Report) , Gates Industrial Corporation PLC (GTES - Free Report) and Howmet Aerospace Inc. (HWM - Free Report) , each carrying a Zacks Rank #2.

Atlas Technical Consultants’ bottom-line estimates have increased to earnings of 75 cents from a loss of $1.01 per share over the past 30 days.

Earnings for Gates Industrial and Howmet Aerospace are expected to grow 82.9% and 21.3% for the current year, respectively.

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