FWLT (MM)

Jacobs Engineering Group Inc. (JEC) recently won a contract from IDEA Soda Ash and Calcium Chloride Company (ISACC) and another from Defense Information Systems Agency/Defense Information Technology Contracting Organization (DISA/DITCO) organization at Scott Air Force Base, Ill.

The first contract requires Jacobs to provide its engineering and project management services for the construction of a soda ash and calcium chloride production facility in Jubail's Second Industrial City in Saudi Arabia. The $300 million facility, the first of its kind in the region, is seen as a major step toward development of Saudi Arabia's non-oil industry. Financial terms of the transaction were not disclosed by the parties. It is anticipated that commercial production would start in the first quarter of 2015.

The other contract, worth $49.5 million with a five year long tenure, was awarded by the Defense Information Systems Agency/Defense Information Technology Contracting Organization (DISA/DITCO) organization at Scott Air Force Base, Ill.

Under the terms of the deal, Jacobs will be supporting, upgrading and sustaining the global mobility and special mission mission planning (GMSMMP) capabilities to include sustainment of prior mission planning software releases to the U.S. Air Force and other Government agencies.

The current Zacks Consensus Estimate for the fourth quarter is 69 cents, representing a year- over-year increase of 22.88%. Estimates for fiscal years 2011 and 2012 are $3.02 and $3.39, reflecting year-over-year growth of 13.88% and 12.44%, 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 #2 Rank, which implies a short-term (1-3 months) Buy rating.

 
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