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Jacobs (J) Tops Q2 Earnings & Revenue Estimates, Update View

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Jacobs Engineering Group Inc. (J - Free Report) reported second-quarter fiscal 2021 (ended Apr 1, 2022) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate and rising year over year.

In connection with the earnings release, the company’s chair and CEO Steve Demetriou stated, "We are seeing accelerating demand across all end markets, with incremental opportunities to scale in the areas of Climate Response, Consulting & Advisory and Data Solutions. These compelling opportunities are reflected in our results with strong bookings performance during the first half of the fiscal year and 9% backlog growth in the second quarter, which positions us well for the remainder of fiscal 2022."

Earnings & Revenue Discussion

For the reported quarter, adjusted earnings of $1.72 per share topped the consensus estimate of $1.70 by 1.2%. Also, the figure was up 3.6% from the year-ago period.

Jacobs Engineering Group Inc. Price, Consensus and EPS Surprise


Jacobs Engineering Group Inc. Price, Consensus and EPS Surprise

Jacobs Engineering Group Inc. price-consensus-eps-surprise-chart | Jacobs Engineering Group Inc. Quote


Jacobs’ revenues totaled $3.83 billion, which topped the consensus mark of $3.77 billion by 1.8% and grew 8.1% year over year. Net revenues improved 10.1% year over year, backed by growth across all lines of business and double-digit organic growth quarter for PA Consulting.

Backlog at fiscal second quarter-end amounted to $27.8 billion, up 8.7% from a year ago.

Segment Details

Revenues from the CMS segment of $1.37 billion increased 4.3% year over year. Yet, segment operating profit of $113.2 million was marginally down from $113.8 million reported a year ago. Backlog at quarter-end was $10.5 billion, up from $9.78 billion a year ago.

Revenues from the P&PS segment totaled $2.17 billion, which inched up 1.4% year over year. Yet, segment operating profit declined 5.4% from the prior-year quarter to $191.4 million. Backlog at quarter-end was $16.96 billion, up from $15.5 billion a year ago.

PA Consulting generated $297.4 million in revenues in the fiscal second quarter, up 202.5% from the year-ago quarter’s figure of $98.3 million. Segment operating profit was $68.3 million, up 144.8% from the prior-year quarter’s levels. Quarter-end backlog amounted to $269 million, down from $280 million a year ago.

Margins Profile

For the quarter under review, adjusted gross profit increased to $870.4 million from the year-ago level of $767.2 million.

Adjusted operating margin contracted to 10.1% from 10.5% in the prior-year quarter.

Balance Sheet & Cash Flow

At the fiscal second quarter-end, Jacobs had cash and cash equivalents of $1,235.4 million, up from $1,014.2 million at the fiscal 2021-end (Oct 1, 2021). Long-term debt increased to $3.2 billion at the fiscal second quarter-end from $2.84 billion as of Oct 1, 2021.

Net cash provided by operating activities totaled $124.6 million in the quarter compared with $237.6 million in the year-ago quarter.

Fiscal 2022 Guidance Narrowed

Jacobs now expects adjusted EBITDA between $1,385 million and $1,435 million from the prior expectation of $1,370-$1,450 million. It now anticipates adjusted earnings within $6.95-$7.35 per share, narrower from $6.85 to $7.45 projected earlier.

Zacks Rank

Jacobs 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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