A month has gone by since the last earnings report for Jacobs Engineering (J Quick QuoteJ - Free Report) . Shares have added about 4.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Jacobs Engineering due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Jacobs (J Quick QuoteJ - Free Report) Q3 Earnings & Revenues Top Estimates, View Raised

Jacobs Engineering Group Inc. reported third-quarter fiscal 2021 (ended Jul 2, 2021) results, wherein earnings and revenues beat the Zacks Consensus Estimate driven by solid project execution. In fact, both the metrics surpassed the consensus mark for the sixth consecutive quarter. Jacobs has also lifted fiscal 2021 outlook, given disciplined execution.

The company’s Chair and CEO Steve Demetriou said, "We believe we are entering an attractive growth period for Jacobs, driven by strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply chain investments. We see these opportunities leading to an increasing and robust sales pipeline developing in FY22 and into FY23."

Earnings & Revenue Discussion

For the reported quarter, adjusted earnings of $1.64 per share outpaced the consensus estimate of $1.48 by 10.8%. The figure also improved 30.2% from the year-ago period.

Jacobs’ revenues totaled $3.58 billion, which surpassed the consensus mark by 0.2% and increased 9.7% year over year. The improvement was driven by healthy segmental performance.

Backlog at fiscal third quarter-end amounted to $25.4 billion, up 7.4% from a year ago.

Segment Details

Revenues from the Critical Mission Solutions segment of $1.22 billion increased 0.6% year over year. Backlog at quarter-end was $9.57 billion, up 5.5% year over year.

Revenues from the People & Places Solutions segment totaled $2.1 billion, which grew 2.6% year over year. Backlog at quarter-end was $15.56 billion, up 6.5% year over year.

Meanwhile, PA Consulting contributed $255.8 million to revenues for the fiscal third quarter. Quarter-end backlog amounted to $314 million.

Margins Profile

For the quarter under review, adjusted gross profit increased 29.5% year over year to $816.9 million.

Adjusted operating margin expanded 170 basis points (bps) to 10.6%. Adjusted EBITDA was $321 million, up 26% year over year. Adjusted EBITDA margin from continuing operations improved 135 bps year over year to 10.8%.

Balance Sheet & Cash Flow

At fiscal third quarter 2021-end, Jacobs had cash and cash equivalents of $966.1 million, up from $862.4 million at the end of fiscal 2020 (ended Oct 2, 2020). Long-term debt increased to $3.07 billion at fiscal third quarter-end from $1.68 billion as of Oct 2, 2020.

The company provided $174.6 million cash for operating activities in the fiscal third quarter compared with $254.1 million in the year-ago period. It generated free cash flow of $153 million in third-quarter fiscal 2021.

Fiscal 2021 Guidance Raised

Buoyed by first nine months of fiscal 2021 performance and investment in PA Consulting, Jacobs lifted its adjusted EBITDA and EPS guidance. Jacobs now expects adjusted EBITDA between $1,210 million and $1,275 million compared with the prior estimate of $1,200-$1,270 million. Also, it now anticipates adjusted earnings within $6.15-$6.35 per share compared with the earlier estimate of $6.00-$6.30.

For fiscal 2022, the company expects to achieve double-digit adjusted EBITDA growth, driven by alignment to long-term secular trends.

Beyond fiscal 2021, it expects multiple secular growth drivers and efficiency gains, which in turn are likely to support double-digit earnings growth.

Jacobs also raised adjusted EPS net accretion expectation from PA Consulting to 35-37 cents from the range of 32-34 cents.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted -6.11% due to these changes.

VGM Scores

At this time, Jacobs Engineering has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Jacobs Engineering has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.