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Jacobs (JEC) Q4 Earnings: Will the Stock Beat Estimates?

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Premium technical services company, Jacobs Engineering Group Inc. (JEC - Free Report) is scheduled to report fourth-quarter fiscal 2016 (ended Sep 30, 2016) results before the market opens on Nov 22, 2016.

In the last four quarters, the company has delivered a positive average earnings surprise of 8.50%.

Let’s see how things are shaping up prior to this announcement.

Factors to Play

Jacobs’ business exposure in diversified end markets is expected to reinforce financials in the fiscal fourth quarter.

Increased transportation spending of the government authorities of Australia and the UK, higher demand for power generation services, rise in aviation demand and growth in spending of biopharmaceutical majors would likely boost Jacobs’ revenues in the quarter under review. Also, the company believes that its strategic operational efficacy enhancement programs would help widen margins in the quarter.

However, several persistent headwinds within the construction industry might hurt the company’s results. For instance, weak energy and mining market conditions have been hindering growth for industrial and construction companies like Jacobs. This is because low prices of oil and core metals have forced the energy and mining companies to postpone, reduce or even cut investments. At the same time, a stronger U.S. currency might weigh over Jacobs’ foreign revenues and earnings in the to-be-reported quarter.

In Aug, 2016, Jacobs narrowed its earnings per share (EPS) guidance to the range of $2.95–$3.15 per share from the previously guided $2.90–$3.20 band for fiscal 2016.

Earnings Whispers

Our proven model does not conclusively show that Jacobs is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as we will see below.

Zacks ESP: Jacobs currently has an Earnings ESP of -2.60%. This is because the Zacks Consensus Estimate of 77 cents is above the Most Accurate estimate of 75 cents.

JACOBS ENGIN GR Price and EPS Surprise



You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Jacobs’ Zacks Rank #4 (Sell), when combined with a negative ESP makes surprise prediction difficult.

Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some stocks within the industry that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Aegion Corp. (AEGN - Free Report) , with an Earnings ESP of +2.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Chicago Bridge & Iron Company N.V. , with an Earnings ESP of +2.76% and a Zacks Rank #3.

Tutor Perini Corp. (TPC - Free Report) , with an Earnings ESP of +4.69% and a Zacks Rank #3.

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