Contract Galore-JEC Wins a Couple - Analyst Blog
March 14 2012 - 4:45AM
Zacks
Contract galore and steady wins
continue for Jacobs Engineering Group Inc. (JEC).
Recently, the company announced receipt of a contract from Vale
Canada Ltd. (Vale) to design and supply a new sulfuric acid plant
for its Sudbury smelter in Ontario, Canada.
The acid plant contract from Vale
Canada Ltd includes the design of the complete sulfuric acid plant
contact section as well as supply of equipment and materials. The
plant will be featuring Jacobs' proprietary Chemetics®
equipment expected to be fabricated at Jacobs' facility in
Pickering, Ontario. . These equipments include stainless steel
converter (with internal exchanger), radial flow gas-gas
exchangers, acid coolers and SARAMET® distributors and
piping. The bulk of the proprietary equipment is expected to be
fabricated at Jacobs' facility in Pickering, Ontario. The
value of the contract is estimated to be around $55 million.
The new acid plant, the second
major project for Jacobs' at the Sudbury Basin Site, is a part of
Vale's Clean Atmospheric Emissions Reduction (AER) Project. Vale
considers the Clean AER Project to be the most significant
environmental investment in the Sudbury Basin, which is designed to
cut sulfur dioxide emissions by more than 70% from current
levels.
Back in 2002, Jacob’s was awarded
with a contract to modernize the existing acid plant. In addition,
the Company served numerous orders for proprietary equipments at
the outset of the original acid plant built in the 90s.
On the same day, the company also
announced that it has been awarded its first option year by NASA
for its Manufacturing Support and Facility Operations Contract
(MSFOC) at the George C. Marshall Space Flight Center's Michoud
Assembly Facility (MAF).
MAF, managed by the Marshall Space
Flight Center in New Orleans, provides a unique capability for
manufacturing large aerospace structures at a single location.
Engaged in designing, assembling and manufacturing of the Space
Shuttle external tank, MAF continues to support the development and
manufacture of hardware for future spaceflight programs.
Jacobs will continue to support
NASA at Michoud and is ready to extent its honorary contribution to
the U.S. space exploration in future. The option year has a
potential value of $137 million.
About Jacobs
Jacobs Engineering Group, one of
the world's largest and most diverse providers of technical,
professional, and construction services, serves a variety of
industrial, commercial and government clients across a global
network.
Our Take
Jacobs presently has a significant
market share in the huge global infrastructure market. The
company’s growing international exposure and diversification across
markets, geographies and services through strategic contract wins
have given it a competitive edge over its peers, such as
Fluor Corporation (FLR) and Foster Wheeler
AG (FWLT).
We currently hold a Neutral
recommendation on the stock. Jacobs has a Zacks #3 Rank, which
translates into a short-term (1-3 months) Hold rating.
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
FOSTER WHELR AG (FWLT): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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