FWLT (MM)

Jacobs Engineering Group Inc. (JEC) recently won two contracts, one from the U.S. Special Operations Command (USSOCOM) and another from the Hudson County Improvement Authority (HCIA), worth approximately $127 million.

As per the agreement that comes under the purview of the Special Operations Forces Information Technology Enterprise Contracts (SITEC) delivery framework, Jacobs will provide information technology service management to USSOCOM. The contract has a base term period of two years and is worth $125 million.

The other contract worth $2.3 million will require Jacobs to provide a preferred alternative for the consolidation of existing ramps and the construction of additional ramps to I-280 to Hudson County Improvement Authority (HCIA).

Over time, Jacobs has been winning strategic contracts from the federal governments of UK, US and beyond; thus making diversification possible across the emerging economies which, in its turn facilitates promoting steady growth even in a competitive environment.

The current Zacks Consensus Estimate for the fourth quarter is 73 cents, representing a year- over-year increase of 18.90%. Estimates for fiscal years 2011 and 2012 are $2.59 and $3.01, reflecting year-over-year growth of 4.44% and 16.30%, respectively.

Jacobs Engineering Group Inc. is one of the world's largest engineering and construction companies providing services to a variety of industrial, commercial and government clients across a global network. The company directly competes with its peers, such as Fluor Corporation (FLR) and Foster Wheeler AG (FWLT).

We currently have a Neutral recommendation on the stock. Jacobs has a Zacks #3 Rank, which implies a short-term (1-3 months) Hold rating.

 
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