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Jacobs (JEC) to Serve NASA for an Additional Year in Hampton

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Jacobs Engineering Group Inc. (JEC - Free Report) has received a one-year contract extension from NASA for the Langley Research Center in Hampton, VA. This Center Maintenance, Operations and Engineering contract is estimated at $46 million, bringing the total contract value to $214 million.

Per the deal, Jacobs will provide facility-related asset management, along with operations and engineering support services. The tenure of the extended contract will likely begin in October and is extended through September 2019.

As part of this contract, Jacobs will support NASA's initiatives in aeronautics, space technology, exploration and Earth science, thereby giving a boost to the company’s Aerospace, Technology, Environmental and Nuclear (“ATEN”) business.

The ongoing contract wins highlight Jacobs’ efforts to earn high-end and differentiated ATEN work. The company is benefiting from major government customers across the Department of Defense, Department of Energy, intelligence community and NASA.

Meanwhile, during fiscal 2018, backlog of $8.9 billion in the said segment grew more than 39% from the prior-year period. Notably, its recent wins included a U.S. NAVY intelligent asset management contract and Department of Energy environmental remediation project.

Shares of Jacobs have outperformed its industry over a year. The outperformance mainly stemmed from the company’s year-over-year growth performance. Moreover, the company surpassed the Zacks Consensus Estimates in each of the trailing four quarters, with the average being 12.4%.

In fact, Jacobs’ recently reported fourth quarter of fiscal 2018 adjusted earnings of $1.31 per share surpassed the consensus mark by 7.4%. Earnings and revenues also increased 34% and 56% year over year, respectively, driven by healthy segmental businesses and accelerated CH2M cost savings, along with strong operational execution. Notably, revenues from the ATEN segment (accounting for 31.4% of its quarterly revenues) grew 100.3% year over year to $1,299.1 million in the quarter.

Zacks Rank & Stocks to Consider

Currently, Jacobs carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Construction sector include KBR, Inc. (KBR - Free Report) , Altair Engineering Inc. (ALTR - Free Report) and EMCOR Group, Inc. (EME - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

KBR surpassed earnings estimates in three of the past four quarters, delivering average positive surprise of 12.6%.

Altair’s earnings are expected to grow 23.1% in 2018.

EMCOR’s earnings for the current year are expected to increase 20%.

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