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Jacobs (J) Q2 Earnings Beat, View Narrowed, Shares Fall
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Jacobs Solutions Inc. (J - Free Report) reported second-quarter fiscal 2024 (ended Mar 29, 2024) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate.
The quarterly performance was backed by robust growth in its People and Places Solutions (P&PS) business with a 7% year-over-year increase in gross profit and backlog growth. This reflects the company's broad-based strength in global infrastructure and sustainability investment.
The company is striving to create a leaner operating model that delivers higher growth and higher margin value for stakeholders. This can be achieved by focusing on disciplined execution and project delivery excellence. Furthermore, J is optimistic about the progress made toward the merger of its Critical Mission Solutions (CMS) and Cyber & Intelligence businesses with Amentum as it looks to establish two independent companies.
Meanwhile, the company has narrowed its guidance for fiscal 2024 adjusted EBITDA and adjusted earnings per share (EPS).
Shares of this construction and technical services company lost 1.1% in the pre-market trading session on May 7, 2024, following its earnings release.
Jacobs Solutions Inc. Price, Consensus and EPS Surprise
For the reported quarter, adjusted EPS of $1.91 topped the consensus estimate of $1.84. Also, the reported figure was down from $2.06 reported in the year-ago period.
Jacobs’ revenues totaled $4.27 billion, which topped the consensus mark of $4.25 billion and increased 4.7% year over year. Adjusted net revenues were up 2.9% year over year.
Adjusted operating profit grew 10% to $391.9 million from a year ago. The adjusted operating margin of 11.3% expanded 70 basis points (bps) year over year.
Adjusted EBITDA increased 9.8% year over year to $393 million and adjusted EBITDA margin expanded 70 bps year over year to 11.3%.
The backlog at the end of second-quarter fiscal 2024 amounted to $29.4 billion, up 2% from a year ago.
Segment Details
Revenues in the CMS segment of $1.23 billion increased 3.2% year over year. The segment’s operating profit was up 10.3% to $104 million from a year ago, with a margin expansion of 54 bps to 8.4%. The backlog at the fiscal second-quarter end was $8.45 billion, up from $8.14 billion a year ago.
Revenues in the P&PS segment totaled $2.52 billion, which increased 7.5% year over year. Net revenues (excluding Pass-Through Revenue) were up by 5.6% year over year. Its operating profit grew 15.3% from the prior-year quarter to $268 million and the margin improved 128 bps to 15.3%. The backlog at the quarter’s end was $17.93 billion, up from $17.56 billion a year ago.
Revenues in the Divergent Solutions segment totaled $224 million, which decreased 7.1% year over year. Divergent Solutions’ net revenues were down 11.6% year over year. Segment operating profit declined 23.7% from the prior-year quarter to $19 million. Its operating margin of 9.6% also fell 154 bps year over year. The backlog at the quarter’s end was $2.68 billion, down from $2.96 billion a year ago.
PA Consulting generated $294 million in revenues, down 2.3% from the year-ago quarter’s period. Its operating profit was $60 million, down 8.3% from $66 million a year ago. Its operating margin fell by 134 bps year over year to 20.5%. The quarter-end backlog amounted to $344 million, up from $319 million a year ago.
Balance Sheet & Cash Flow
At the fiscal second-quarter end, Jacobs had cash and cash equivalents of $1.03 billion, up from $926.6 million at the fiscal 2023-end (Sep 29, 2023). Long-term debt decreased to $2.16 billion at the fiscal second-quarter end from $2.81 billion at the fiscal 2023-end.
Net cash provided by operating activities totaled $375.5 million in the first six months of fiscal 2024 compared with $434.3 million in the year-ago quarter. The free cash flow was $330.4 million during the period versus $367 million a year ago.
Fiscal 2024 Guidance Narrowed
Jacobs now expects adjusted EBITDA between $1.54 billion and $1.585 billion versus $1.53 billion and $1.6 billion expected earlier. The estimated range reflects 9% growth from the previous year, considering the midpoint. It now anticipates adjusted EPS within $7.80-$8.10 versus $7.70-$8.20 of earlier projection, depicting 10% year-over-year growth at the midpoint.
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The downside was due to lower contributions from FLR’s Energy and Mission Solutions segments. However, solid contributions from Urban Solutions aided the top line. The company experienced solid growth in new awards and backlog value, solidifying its growth prospects.
Quanta Services Inc. (PWR - Free Report) reported better-than-expected results for first-quarter 2024, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.
Quanta's performance in the first quarter marks a strong beginning to the year, characterized by impressive growth across key metrics. Double-digit increases in revenue, adjusted EBITDA, and adjusted EPS, alongside record cash flow, underscore the company's robust performance. Notably, the Electric Power Infrastructure Solutions segment exceeded expectations, delivering superior profitability attributed to consistent operational excellence and safe execution.
KBR, Inc. (KBR - Free Report) reported better-than-expected results for first-quarter 2024 (ended Mar 29), wherein earnings and revenues surpassed the Zacks Consensus Estimate.
KBR’s earnings and revenues grew on a year-over-year basis, particularly showcasing solid performance in adjusted EBITDA and operating cash flow. Bookings during the quarter were well-aligned with end markets across energy security, national defense, human performance, and sustainability.
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Jacobs (J) Q2 Earnings Beat, View Narrowed, Shares Fall
Jacobs Solutions Inc. (J - Free Report) reported second-quarter fiscal 2024 (ended Mar 29, 2024) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate.
The quarterly performance was backed by robust growth in its People and Places Solutions (P&PS) business with a 7% year-over-year increase in gross profit and backlog growth. This reflects the company's broad-based strength in global infrastructure and sustainability investment.
The company is striving to create a leaner operating model that delivers higher growth and higher margin value for stakeholders. This can be achieved by focusing on disciplined execution and project delivery excellence. Furthermore, J is optimistic about the progress made toward the merger of its Critical Mission Solutions (CMS) and Cyber & Intelligence businesses with Amentum as it looks to establish two independent companies.
Meanwhile, the company has narrowed its guidance for fiscal 2024 adjusted EBITDA and adjusted earnings per share (EPS).
Shares of this construction and technical services company lost 1.1% in the pre-market trading session on May 7, 2024, following its earnings release.
Jacobs Solutions Inc. Price, Consensus and EPS Surprise
Jacobs Solutions Inc. price-consensus-eps-surprise-chart | Jacobs Solutions Inc. Quote
Earnings & Revenue Discussion
For the reported quarter, adjusted EPS of $1.91 topped the consensus estimate of $1.84. Also, the reported figure was down from $2.06 reported in the year-ago period.
Jacobs’ revenues totaled $4.27 billion, which topped the consensus mark of $4.25 billion and increased 4.7% year over year. Adjusted net revenues were up 2.9% year over year.
Adjusted operating profit grew 10% to $391.9 million from a year ago. The adjusted operating margin of 11.3% expanded 70 basis points (bps) year over year.
Adjusted EBITDA increased 9.8% year over year to $393 million and adjusted EBITDA margin expanded 70 bps year over year to 11.3%.
The backlog at the end of second-quarter fiscal 2024 amounted to $29.4 billion, up 2% from a year ago.
Segment Details
Revenues in the CMS segment of $1.23 billion increased 3.2% year over year. The segment’s operating profit was up 10.3% to $104 million from a year ago, with a margin expansion of 54 bps to 8.4%. The backlog at the fiscal second-quarter end was $8.45 billion, up from $8.14 billion a year ago.
Revenues in the P&PS segment totaled $2.52 billion, which increased 7.5% year over year. Net revenues (excluding Pass-Through Revenue) were up by 5.6% year over year. Its operating profit grew 15.3% from the prior-year quarter to $268 million and the margin improved 128 bps to 15.3%. The backlog at the quarter’s end was $17.93 billion, up from $17.56 billion a year ago.
Revenues in the Divergent Solutions segment totaled $224 million, which decreased 7.1% year over year. Divergent Solutions’ net revenues were down 11.6% year over year. Segment operating profit declined 23.7% from the prior-year quarter to $19 million. Its operating margin of 9.6% also fell 154 bps year over year. The backlog at the quarter’s end was $2.68 billion, down from $2.96 billion a year ago.
PA Consulting generated $294 million in revenues, down 2.3% from the year-ago quarter’s period. Its operating profit was $60 million, down 8.3% from $66 million a year ago. Its operating margin fell by 134 bps year over year to 20.5%. The quarter-end backlog amounted to $344 million, up from $319 million a year ago.
Balance Sheet & Cash Flow
At the fiscal second-quarter end, Jacobs had cash and cash equivalents of $1.03 billion, up from $926.6 million at the fiscal 2023-end (Sep 29, 2023). Long-term debt decreased to $2.16 billion at the fiscal second-quarter end from $2.81 billion at the fiscal 2023-end.
Net cash provided by operating activities totaled $375.5 million in the first six months of fiscal 2024 compared with $434.3 million in the year-ago quarter. The free cash flow was $330.4 million during the period versus $367 million a year ago.
Fiscal 2024 Guidance Narrowed
Jacobs now expects adjusted EBITDA between $1.54 billion and $1.585 billion versus $1.53 billion and $1.6 billion expected earlier. The estimated range reflects 9% growth from the previous year, considering the midpoint. It now anticipates adjusted EPS within $7.80-$8.10 versus $7.70-$8.20 of earlier projection, depicting 10% year-over-year growth at the midpoint.
Zacks Rank
Jacobs currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Fluor Corporation (FLR - Free Report) reported tepid results for first-quarter 2024, with earnings and revenues missing the Zacks Consensus Estimate. On a year-over-year basis earnings increased, despite a revenue decline.
The downside was due to lower contributions from FLR’s Energy and Mission Solutions segments. However, solid contributions from Urban Solutions aided the top line. The company experienced solid growth in new awards and backlog value, solidifying its growth prospects.
Quanta Services Inc. (PWR - Free Report) reported better-than-expected results for first-quarter 2024, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.
Quanta's performance in the first quarter marks a strong beginning to the year, characterized by impressive growth across key metrics. Double-digit increases in revenue, adjusted EBITDA, and adjusted EPS, alongside record cash flow, underscore the company's robust performance. Notably, the Electric Power Infrastructure Solutions segment exceeded expectations, delivering superior profitability attributed to consistent operational excellence and safe execution.
KBR, Inc. (KBR - Free Report) reported better-than-expected results for first-quarter 2024 (ended Mar 29), wherein earnings and revenues surpassed the Zacks Consensus Estimate.
KBR’s earnings and revenues grew on a year-over-year basis, particularly showcasing solid performance in adjusted EBITDA and operating cash flow. Bookings during the quarter were well-aligned with end markets across energy security, national defense, human performance, and sustainability.