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Jacobs' (JEC) JV Unit Clinches $65M Deal, Prospects Bright

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Jacobs Engineering Group Inc. continues to reinforce its organic growth trajectory with a $65-million Federal Emergency Management Agency (FEMA) contract. The company’s joint-venture (JV) business with CDM Smith Inc. secured this deal for providing technical support, construction and project management services, as well as public aiding recovery operations in Puerto Rico, for restoring damages caused by Hurricane Maria. The one-year contract also includes half year extension option valuing $35 million.

In sync with the terms of the deal, Jacobs will provide its specialized services after assessing the damages and conducting site visits in key infrastructure locations of Puerto Rico. Moreover, economic hazard-mitigation measures and restoration of damaged infrastructure will be undertaken by the company with consultation of the Government and other stakeholders of Puerto Rico.

Jacobs has been providing its services for three major task orders of FEMA since November 2017. These responsibilities are focused on housing inspections, infrastructure projects and other similar professional services required for hurricane recovery activities on St. Thomas, St. John and St. Croix.

What’s Driving Jacobs’ Stock?

Over the past month, shares of this Zacks Rank #2 (Buy) company have rallied 12.3%, outperforming 2.1% growth recorded by the industry.

Notably, Jacobs currently flaunts a VGM Score of A. The Zacks Consensus Estimate for the company’s fiscal 2018 (ending September 2018) earnings moved up 6.2% to $4.26, over the past 30 days. Its projected year-over-year earnings growth is pegged at 31.5% for the current fiscal.

Several contract wins and increased worldwide construction spending have been driving Jacobs’ revenues for the last few quarters. The company’s profitability is also improving on the back of higher revenues, increased focus on high-value businesses, efficient project execution and high CH2M HILL Companies Ltd. profitability (acquired in December 2017).

Notably, Jacobs currently anticipates adjusted earnings in the $4.00-$4.40 per share range for fiscal 2018, higher than the prior projection of $3.85-$4.25 per share.

Other Stocks to Consider

Altair Engineering Inc. (ALTR - Free Report) , Gates Industrial Corp. PLC (GTES - Free Report) and KBR, Inc. (KBR - Free Report) are other similarly-ranked stocks in the same industry. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Altair Engineering has pulled off an average positive earnings surprise of 30.56%, over the past four quarters.

Gates Industrial came up with an average positive earnings surprise of 31.58%, over the trailing four quarters.

KBR, Inc generated an average positive earnings surprise of 14.05% during the same time frame.

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