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Jacobs Wins Multiple Contracts Worth $25M From ITER & UKAEA
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Jacobs Engineering Group Inc. (J - Free Report) has received multiple contracts from Fusion for Energy (F4E), ITER organization and the United Kingdom Atomic Energy Authority (UKAEA). The combined value of these contracts is more than $25 million.
Jacob’s Association With ITER
ITER organization has chosen Jacobs to deliver a range of technological and engineering innovation and support to Saint-Paul-les-Durance, which is a France-based world's largest fusion energy project.
Jacobs will provide integrated engineering framework to ITER’s consortium with Orano Projects and the Madrid-based Universidad Nacional de Education a Distancia. The main focus of the work is to minimize operator exposure to radiation during planned maintenance activities. Jacobs is developing and supplying technology to monitor corrosion in the hermetically sealed vacuum vessel that houses fusion reactions. Importantly, the deal also includes the production of safety documentation for submission to French regulators.
Additionally, Jacobs has been awarded both lots of a framework contract from ITER organization to offer engineering support to the Tokamak Complex Detritiation System, which is the key to decontamination and fuel recycling.
Jacobs is supporting European Union’s contribution to ITER via Fusion for Energy. The company is representing safe operating and maintenance methods for helium-cooled pebble bed test blanket technology. Also, it is undertaking the construction design of the hydrogen monitoring system in the tokamak and tritium buildings, which is a major safety feature of the ITER machine.
Jacobs’ Critical Mission Solutions (CMS) unit has been providing various innovative technology services to the ITER project for more than 20 years.
Jacob’s Support to UKAEA
Jacobs won a $18.4-million design, engineering and manufacturing contract from UKAEA for fusion power stations. The company will design and build a test facility to replicate typical fusion conditions of extreme heat flux, high-pressure cooling and immensely strong electromagnetic fields.
Jacobs will support UKAEA scientists, with partners throughout the world, to develop fusion as a new source of cleaner energy for tomorrow's power stations. In addition to, this U.K. government’s research organization awarded the company with a range of work to support the Spherical Tokamak for Energy Production to design and build a prototype fusion reactor, demonstrating its commercial viability.
Long-Term Prospects Bode Well
Jacobs’ shares have outperformed the industry so far this year. The outperformance is likely to continue in the near term, buoyed by strong backlog, inorganic moves, its transformed portfolio, and increased focus on infrastructure, aerospace, cybersecurity and technical building projects.
The CMS segment has been a major contributor to its revenue growth. Recently, the company reported strong results in the fiscal first quarter on the back of solid segmental performance, acquisitions and cost synergies.
Over the next three years (through 2021), management aims a 125-175 basis points (bps) expansion in adjusted operating margins. The company anticipates a 100-150 bps increase in CMS margins and 110-140 bps growth in People & Places Solutions or P&PS margin, supported by the elimination of ECR.
It projects 3-5% net organic revenue growth, with P&PS contributing 4-6% compound annual growth rate (CAGR) and CMS’ CAGR being 23%. The top-line growth is expected to be driven by recurring revenues that roughly occupy two-thirds of Jacobs’ total revenues, in turn reducing overall risks of market volatility.
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Jacobs Wins Multiple Contracts Worth $25M From ITER & UKAEA
Jacobs Engineering Group Inc. (J - Free Report) has received multiple contracts from Fusion for Energy (F4E), ITER organization and the United Kingdom Atomic Energy Authority (UKAEA). The combined value of these contracts is more than $25 million.
Jacob’s Association With ITER
ITER organization has chosen Jacobs to deliver a range of technological and engineering innovation and support to Saint-Paul-les-Durance, which is a France-based world's largest fusion energy project.
Jacobs will provide integrated engineering framework to ITER’s consortium with Orano Projects and the Madrid-based Universidad Nacional de Education a Distancia. The main focus of the work is to minimize operator exposure to radiation during planned maintenance activities. Jacobs is developing and supplying technology to monitor corrosion in the hermetically sealed vacuum vessel that houses fusion reactions. Importantly, the deal also includes the production of safety documentation for submission to French regulators.
Additionally, Jacobs has been awarded both lots of a framework contract from ITER organization to offer engineering support to the Tokamak Complex Detritiation System, which is the key to decontamination and fuel recycling.
Jacobs is supporting European Union’s contribution to ITER via Fusion for Energy. The company is representing safe operating and maintenance methods for helium-cooled pebble bed test blanket technology. Also, it is undertaking the construction design of the hydrogen monitoring system in the tokamak and tritium buildings, which is a major safety feature of the ITER machine.
Jacobs’ Critical Mission Solutions (CMS) unit has been providing various innovative technology services to the ITER project for more than 20 years.
Jacob’s Support to UKAEA
Jacobs won a $18.4-million design, engineering and manufacturing contract from UKAEA for fusion power stations. The company will design and build a test facility to replicate typical fusion conditions of extreme heat flux, high-pressure cooling and immensely strong electromagnetic fields.
Jacobs will support UKAEA scientists, with partners throughout the world, to develop fusion as a new source of cleaner energy for tomorrow's power stations. In addition to, this U.K. government’s research organization awarded the company with a range of work to support the Spherical Tokamak for Energy Production to design and build a prototype fusion reactor, demonstrating its commercial viability.
Long-Term Prospects Bode Well
Jacobs’ shares have outperformed the industry so far this year. The outperformance is likely to continue in the near term, buoyed by strong backlog, inorganic moves, its transformed portfolio, and increased focus on infrastructure, aerospace, cybersecurity and technical building projects.
The CMS segment has been a major contributor to its revenue growth. Recently, the company reported strong results in the fiscal first quarter on the back of solid segmental performance, acquisitions and cost synergies.
Over the next three years (through 2021), management aims a 125-175 basis points (bps) expansion in adjusted operating margins. The company anticipates a 100-150 bps increase in CMS margins and 110-140 bps growth in People & Places Solutions or P&PS margin, supported by the elimination of ECR.
It projects 3-5% net organic revenue growth, with P&PS contributing 4-6% compound annual growth rate (CAGR) and CMS’ CAGR being 23%. The top-line growth is expected to be driven by recurring revenues that roughly occupy two-thirds of Jacobs’ total revenues, in turn reducing overall risks of market volatility.
Jacobs — which shares space with AECOM (ACM - Free Report) , KBR, Inc. (KBR - Free Report) and Fluor Corporation (FLR - Free Report) in the same industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Best Stocks from Zacks
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This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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