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In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 5.9% but revenues beat the same by 3.7%. On a year-over-year basis, its earnings grew 5.6% and revenues grew 10.5%.
The leading provider of professional, technical and construction services’ earnings topped the consensus mark in two of the last four quarters and missed on other two occasions, with the average negative surprise being 0.4%.
Trend in Estimates
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) decreased to $1.50 from $1.57 in the past 60 days. The estimated figure indicates a 10.2% decline from $1.67 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $4.01 billion, suggesting 5.6% growth from the year-ago quarter’s reported figure of $3.8 billion.
Jacobs is anticipated to have experienced increased revenues in the first quarter of fiscal 2024, given investments from the U.S. Infrastructure Act and other economic stimuli. The company's deliberate shift from an engineering and construction entity to a globally-oriented technology solutions company is likely to be evident in the reported numbers. Furthermore, the quarter is expected to showcase a favorable impact from a higher-margin backlog, a commitment to efficiency through digital and technological solutions, and strong project execution, all contributing to overall growth.
J’s continuous shift to digitalization and leadership in strategic end markets like space exploration, life sciences, cyber and water solutions bode well. Again, the U.S. Department of Defense’s increased focus on strategic data utilization is likely to have driven Jacobs’ growth.
A favorable revenue mix in both People & Places Solutions (P&PS) and Critical Mission Solutions (CMS) segments and benefits from PA Consulting (which has a solid accretive gross margin profile of nearly 50%) are likely to get reflected in margins. However, higher overhead costs to facilitate the separation of CMS might have dented margins.
Segment-wise, higher spending from the transportation sector and accelerated investments toward drinking water, wastewater, flood protection and climate resilience might have aided the company’s fiscal first-quarter performance in the P&PS segment (which accounted for 58% of total revenues in fiscal 2022).
Rapid implementation of digital technologies has been optimizing clients’ operational spending and mitigating revenue challenges. Further, environmental and green economy projects remain strong.
The Zacks Consensus Estimate for P&PS segment revenues is currently pegged at $2,137 million, reflecting a decline of 4% year over year in the quarter. Nonetheless, P&PS’s operating profit is expected to grow 6% to $242 million from a year ago.
The CMS segment (36% of total revenues) is expected to have benefited from the consistent performance of the Cyber and Mission-IT business. The company’s CMS strategy has been focused on creating resilient revenue growth and margin expansion by offering technology-enabled solutions aligned to critical national priorities that drive innovative outcomes. Jacobs has been pursuing global energy transition, space-based ISR, intelligence analytics and 5G networks.
The consensus mark for the CMS segment’s revenues is currently pegged at $1,129 million, indicating growth of 5% a year ago. The CMS segment’s operating profit is expected to be $92 million, up from $82 million a year ago.
Meanwhile, on Nov 20, 2023, Jacobs inked a deal to spin off and merge its CMS business and Cyber & Intelligence unit (which is part of the DVS segment) with a global engineering and technology solutions provider, Amentum. For that, Jacobs anticipates temporarily increased overhead costs necessary to facilitate the separation of CMS, encompassing IT and corporate support. Alongside historical seasonality factors, this is expected to result in an approximate 10% year-over-year negative impact on adjusted EPS for the quarter.
What the Zacks Model Says
Our proven model predicts an earnings beat for Jacobs this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.
Earnings ESP: The company has an Earnings ESP of +1.06%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Jacobs currently carries a Zacks Rank #3.
Other Stocks With Favorable Combination
Here are some other companies, which, according to our model, have the right combination of elements to post an earnings beat on their respective quarters to be reported.
Vulcan Materials Company (VMC - Free Report) has an Earnings ESP of +1.85% and carries a Zacks Rank #3.
VMC’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 13.6%. Earnings for the to-be-reported quarter are expected to grow 25.9% year over year.
AWI’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 7.9%. Earnings for the to-be-reported quarter are expected to decline 4.6% year over year.
Owens Corning (OC - Free Report) has an Earnings ESP of +1.95% and carries a Zacks Rank #2.
OC’s earnings topped the consensus mark in all the last four quarters, with the average being 17.5%. Earnings for the to-be-reported quarter are expected to grow 13.3% year over year.
Image: Bigstock
Jacobs (J) Gears Up to Report Q1 Earnings: What's in Store?
Jacobs Engineering Group Inc. (J - Free Report) is slated to report first-quarter fiscal 2024 results on Feb 6, before market open.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 5.9% but revenues beat the same by 3.7%. On a year-over-year basis, its earnings grew 5.6% and revenues grew 10.5%.
The leading provider of professional, technical and construction services’ earnings topped the consensus mark in two of the last four quarters and missed on other two occasions, with the average negative surprise being 0.4%.
Trend in Estimates
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) decreased to $1.50 from $1.57 in the past 60 days. The estimated figure indicates a 10.2% decline from $1.67 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $4.01 billion, suggesting 5.6% growth from the year-ago quarter’s reported figure of $3.8 billion.
Jacobs Solutions Inc. Price and EPS Surprise
Jacobs Solutions Inc. price-eps-surprise | Jacobs Solutions Inc. Quote
Factors to Note
Jacobs is anticipated to have experienced increased revenues in the first quarter of fiscal 2024, given investments from the U.S. Infrastructure Act and other economic stimuli. The company's deliberate shift from an engineering and construction entity to a globally-oriented technology solutions company is likely to be evident in the reported numbers. Furthermore, the quarter is expected to showcase a favorable impact from a higher-margin backlog, a commitment to efficiency through digital and technological solutions, and strong project execution, all contributing to overall growth.
J’s continuous shift to digitalization and leadership in strategic end markets like space exploration, life sciences, cyber and water solutions bode well. Again, the U.S. Department of Defense’s increased focus on strategic data utilization is likely to have driven Jacobs’ growth.
A favorable revenue mix in both People & Places Solutions (P&PS) and Critical Mission Solutions (CMS) segments and benefits from PA Consulting (which has a solid accretive gross margin profile of nearly 50%) are likely to get reflected in margins. However, higher overhead costs to facilitate the separation of CMS might have dented margins.
Segment-wise, higher spending from the transportation sector and accelerated investments toward drinking water, wastewater, flood protection and climate resilience might have aided the company’s fiscal first-quarter performance in the P&PS segment (which accounted for 58% of total revenues in fiscal 2022).
Rapid implementation of digital technologies has been optimizing clients’ operational spending and mitigating revenue challenges. Further, environmental and green economy projects remain strong.
The Zacks Consensus Estimate for P&PS segment revenues is currently pegged at $2,137 million, reflecting a decline of 4% year over year in the quarter. Nonetheless, P&PS’s operating profit is expected to grow 6% to $242 million from a year ago.
The CMS segment (36% of total revenues) is expected to have benefited from the consistent performance of the Cyber and Mission-IT business. The company’s CMS strategy has been focused on creating resilient revenue growth and margin expansion by offering technology-enabled solutions aligned to critical national priorities that drive innovative outcomes. Jacobs has been pursuing global energy transition, space-based ISR, intelligence analytics and 5G networks.
The consensus mark for the CMS segment’s revenues is currently pegged at $1,129 million, indicating growth of 5% a year ago. The CMS segment’s operating profit is expected to be $92 million, up from $82 million a year ago.
Meanwhile, on Nov 20, 2023, Jacobs inked a deal to spin off and merge its CMS business and Cyber & Intelligence unit (which is part of the DVS segment) with a global engineering and technology solutions provider, Amentum. For that, Jacobs anticipates temporarily increased overhead costs necessary to facilitate the separation of CMS, encompassing IT and corporate support. Alongside historical seasonality factors, this is expected to result in an approximate 10% year-over-year negative impact on adjusted EPS for the quarter.
What the Zacks Model Says
Our proven model predicts an earnings beat for Jacobs this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.
Earnings ESP: The company has an Earnings ESP of +1.06%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Jacobs currently carries a Zacks Rank #3.
Other Stocks With Favorable Combination
Here are some other companies, which, according to our model, have the right combination of elements to post an earnings beat on their respective quarters to be reported.
Vulcan Materials Company (VMC - Free Report) has an Earnings ESP of +1.85% and carries a Zacks Rank #3.
VMC’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 13.6%. Earnings for the to-be-reported quarter are expected to grow 25.9% year over year.
Armstrong World Industries, Inc. (AWI - Free Report) has an Earnings ESP of +2.66% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
AWI’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 7.9%. Earnings for the to-be-reported quarter are expected to decline 4.6% year over year.
Owens Corning (OC - Free Report) has an Earnings ESP of +1.95% and carries a Zacks Rank #2.
OC’s earnings topped the consensus mark in all the last four quarters, with the average being 17.5%. Earnings for the to-be-reported quarter are expected to grow 13.3% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.