Back to top

Image: Bigstock

Jacobs (JEC) to Report Q4 Earnings: Is a Beat in the Cards?

Read MoreHide Full Article

Jacobs Engineering Group Inc. is scheduled to report fourth-quarter fiscal 2019 results on Nov 25, before the opening bell.

In the last reported quarter, the company’s earnings and revenues beat the Zacks Consensus Estimate by 12% and 0.7%, respectively. On a year-over-year basis, earnings and revenues of this leading provider of professional, technical and construction services grew 12.9% and 8%, respectively, given continuous innovation, solid project execution, and diversification into new high-margin growth opportunities.

Markedly, Jacobs — which shares space in the Zacks Engineering - R and D Services industry with Quanta Services, Inc. (PWR - Free Report) , AECOM (ACM - Free Report) and Gates Industrial Corporation PLC (GTES - Free Report) — surpassed earnings estimates in eight of the trailing nine quarters.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has been unchanged at $1.28 over the past 30 days. The estimated figure indicates a decrease of 2.3% from $1.31 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $3.31 billion, suggesting a 20% decline from the year-ago reported figure of $$4.14 billion.

Factors to Note

Jacobs’ fiscal fourth-quarter earnings are expected to have declined on soft revenues. It expects moderate top-line growth in the second half of fiscal 2019, courtesy of strong first-half results and tough comps. Notably, with the completion of the ECR sale and KeyW acquisition, its portfolio transformation appears to be largely complete.

Jacobs’s Aerospace, Technology and Nuclear or ATN segment (comprising 36.5% of total revenues) is expected to have benefited from the U.S. federal government's increased focus on defense, energy, intelligence community and NASA. Its strength in critical federal service agencies such DoD and NASA, and ability to gain share through advanced technological applications and efficiencies are likely to reflect on the upcoming quarterly results. Moreover, integration benefits from KeyW are likely to have supported the ATN segment.

The Buildings, Infrastructure and Advanced Facilities or BIAF segment is also expected to have benefited from its strength to capitalize on more economically resistant end markets such as infrastructure, water management, and environmental remediation. The company’s technological edge in infrastructure, water management and environmental remediation provided strength to Jacobs in the period of a macro slowdown.

Overall Earnings & Revenue Picture

Dismal revenues are likely to reflect on fiscal fourth-quarter results. This is likely to have offset Jacobs’ prudent cost-management efforts and improved project execution. These positive factors are likely to have supported the company’s bottom line to some extent in the to-be-reported quarter. Its efforts toward increasing the share of higher-margin backlog, and dependence on recurring revenues and rebid wins are also likely to have aided the bottom line to some extent.

What the Zacks Model Says

Our proven model predicts an earnings beat for Jacobs this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, it has a Zacks Rank #2 and an Earnings ESP of +1.22%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>


Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


Quanta Services, Inc. (PWR) - $25 value - yours FREE >>

AECOM (ACM) - $25 value - yours FREE >>

Gates Industrial Corporation PLC (GTES) - $25 value - yours FREE >>

Published in