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Jacobs Engineering (J) Down 1.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Jacobs Engineering (J - Free Report) . Shares have lost about 1.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Jacobs Engineering due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Jacobs Engineering Group Inc. reported first-quarter fiscal 2021 (ended Dec 31, 2021) results, wherein earnings and revenues missed the respective Zacks Consensus Estimate.
In connection with the earnings release, the company’s president and CFO Kevin Berryman said, “We delivered strong performance during the quarter with double-digit backlog growth across all businesses as multiple global growth trends gain momentum. Our advanced facilities revenue grew double-digits driven by supply chain investments across semiconductors and life sciences manufacturing, and we expect infrastructure modernization in the U.S. to further materialize later in 2022.”
Meanwhile, on Feb 7, Jacobs announced the acquisition of mobility analytics leader StreetLight. This buyout reflects another data-rich software platform addition to its portfolio, which is expected to provide highly profitable long-term recurring revenue growth opportunities.
Earnings & Revenue Discussion
For the reported quarter, adjusted earnings of $1.56 per share lagged the consensus estimate of $1.60 by 2.5%. Nonetheless, the figure was up 10.6% from the year-ago period.
Jacobs’ revenues totaled $3.38 billion, which missed the consensus mark of $3.64 billion by 7.2% but remained flat year over year. Net revenues grew 6.4% year over year.
Backlog at fiscal first quarter-end amounted to $28 billion, up 12% from a year ago.
Segment Details
Revenues from the CMS segment of $1.16 billion decreased 10.3% year over year.
Nonetheless, segment operating profit of $111.5 million was up 1.3% year over year for the quarter.
Backlog at quarter-end was $10.8 billion, up 11.5% year over year.
Revenues from the P&PS segment totaled $1.93 billion, which dropped 7.6% year over year. Yet, segment operating profit declined 2.3% from the prior-year quarter to $191.7 million.
Backlog at quarter-end was $16.93 billion, up 10% year over year.
Meanwhile, PA Consulting contributed $290 million to revenues for the fiscal first quarter. Segment operating profit was $63.1 million.
Quarter-end backlog amounted to $276 million.
Margins Profile
For the quarter under review, adjusted gross profit increased to $796.5 million from the year-ago level of $632.2 million.
Adjusted operating margin expanded to 10.6% from 9.5% in the prior-year quarter. Adjusted EBITDA was $310 million, up 11% year over year.
Balance Sheet & Cash Flow
At fiscal first quarter-end (Dec 31, 2021), Jacobs had cash and cash equivalents of $1,245 million, up from $1,014.2 million at fiscal 2021-end (Oct 1, 2021). Long-term debt increased to $3.07 billion at fiscal first quarter-end from $2.84 billion as of Oct 1, 2021.
The company provided $321.6 million cash for operating activities in the quarter compared with $112.6 million in the year-ago period. It generated free cash flow of $302.3 million in the fiscal first quarter versus $95.9 million a year ago.
Fiscal 2022 Guidance
Jacobs expects adjusted EBITDA between $1,370 million and $1,450 million. Also, it anticipates adjusted earnings within $6.85-$7.45 per share.
The company expects adjusted EPS of $10.00 for fiscal 2025. The guidance includes expected benefits to P&PS from the recently passed Infrastructure Investment and Jobs Act. Jacobs has a robust CMS sales pipeline and sees sustained growth in PA Consulting.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, 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 top 40% 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
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Jacobs Engineering has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Jacobs Engineering (J) Down 1.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Jacobs Engineering (J - Free Report) . Shares have lost about 1.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Jacobs Engineering due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Jacobs (J - Free Report) Misses on Q1 Earnings & Revenues, Reaffirms View
Jacobs Engineering Group Inc. reported first-quarter fiscal 2021 (ended Dec 31, 2021) results, wherein earnings and revenues missed the respective Zacks Consensus Estimate.
In connection with the earnings release, the company’s president and CFO Kevin Berryman said, “We delivered strong performance during the quarter with double-digit backlog growth across all businesses as multiple global growth trends gain momentum. Our advanced facilities revenue grew double-digits driven by supply chain investments across semiconductors and life sciences manufacturing, and we expect infrastructure modernization in the U.S. to further materialize later in 2022.”
Meanwhile, on Feb 7, Jacobs announced the acquisition of mobility analytics leader StreetLight. This buyout reflects another data-rich software platform addition to its portfolio, which is expected to provide highly profitable long-term recurring revenue growth opportunities.
Earnings & Revenue Discussion
For the reported quarter, adjusted earnings of $1.56 per share lagged the consensus estimate of $1.60 by 2.5%. Nonetheless, the figure was up 10.6% from the year-ago period.
Jacobs’ revenues totaled $3.38 billion, which missed the consensus mark of $3.64 billion by 7.2% but remained flat year over year. Net revenues grew 6.4% year over year.
Backlog at fiscal first quarter-end amounted to $28 billion, up 12% from a year ago.
Segment Details
Revenues from the CMS segment of $1.16 billion decreased 10.3% year over year.
Nonetheless, segment operating profit of $111.5 million was up 1.3% year over year for the quarter.
Backlog at quarter-end was $10.8 billion, up 11.5% year over year.
Revenues from the P&PS segment totaled $1.93 billion, which dropped 7.6% year over year. Yet, segment operating profit declined 2.3% from the prior-year quarter to $191.7 million.
Backlog at quarter-end was $16.93 billion, up 10% year over year.
Meanwhile, PA Consulting contributed $290 million to revenues for the fiscal first quarter. Segment operating profit was $63.1 million.
Quarter-end backlog amounted to $276 million.
Margins Profile
For the quarter under review, adjusted gross profit increased to $796.5 million from the year-ago level of $632.2 million.
Adjusted operating margin expanded to 10.6% from 9.5% in the prior-year quarter. Adjusted EBITDA was $310 million, up 11% year over year.
Balance Sheet & Cash Flow
At fiscal first quarter-end (Dec 31, 2021), Jacobs had cash and cash equivalents of $1,245 million, up from $1,014.2 million at fiscal 2021-end (Oct 1, 2021). Long-term debt increased to $3.07 billion at fiscal first quarter-end from $2.84 billion as of Oct 1, 2021.
The company provided $321.6 million cash for operating activities in the quarter compared with $112.6 million in the year-ago period. It generated free cash flow of $302.3 million in the fiscal first quarter versus $95.9 million a year ago.
Fiscal 2022 Guidance
Jacobs expects adjusted EBITDA between $1,370 million and $1,450 million. Also, it anticipates adjusted earnings within $6.85-$7.45 per share.
The company expects adjusted EPS of $10.00 for fiscal 2025. The guidance includes expected benefits to P&PS from the recently passed Infrastructure Investment and Jobs Act. Jacobs has a robust CMS sales pipeline and sees sustained growth in PA Consulting.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, 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 top 40% 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
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Jacobs Engineering has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.