JEC Jacobs Engineering Group Inc

Jacobs Engineering Group Inc. (JEC) will be reporting its first-quarter 2012 earnings on Wednesday, January 25, 2012.

The current Zacks Consensus Estimate for earnings per share (EPS) is 69 cents, representing an annualized growth of 22.79%.  

With respect to earnings surprises over the trailing four quarters, Jacobs outperformed the Zacks Consensus Estimate in two quarters, was in line in one while underperformed in the rest. Average earnings surprise was a negative 0.29%, indicating that the company underperformed the Zacks Consensus Estimate by the same magnitude over the last four quarters.

Fourth Quarter and Fiscal 2011 Highlights

On November 14, 2011, Jacobs reported its financial results for the fourth quarter and fiscal 2011 with earnings per diluted share of 74 cents in the quarter, up from 61 cents reported in the year-ago quarter, based on economic conditions and sales success. Results were marginally above the Zacks Consensus Estimate of 73 cents. For FY11, the company reported earnings per diluted share of $2.60.

Total revenue in the fourth quarter jumped 16.2% year over year to $2,723.3 million, below the Zacks Consensus Estimate of $2,768.0 million. For FY11, the company reported total revenue of approximately $10,381 million in the quarter, up from $9,915.5 million in fiscal 2010.

Agreement of Estimate Revisions   

In the last 30 days, no analyst increased or decreased the company’s earnings per share (EPS) estimates for the first quarter of 2012, as there was no catalyst for such change. For fiscal 2012, none anticipated any change; hence neither increased nor decreased their estimates.

Magnitude of Estimate Revisions   

Estimates over the last 30 days remained static at 69 cents per share for the first quarter of 2012, representing a year-over-year growth of 22.79%.

Estimate for fiscal 2012 showed also remained static at $3.02 over the last 30 days while that for fiscal 2013 showed an upward trend, marginally rising from $3.39 to $3.40. These estimates represented a year-over-year growth of 13.88% for 2012 and 12.75% for 2013.

Our Take   

We believe that the company’s long-term relationships with its core clientele, on-time project execution as well ascontract wins and acquisitions across geographies and serviceswill culminate in satisfactory results.  The company’s steady backlog, its focus on streamlining capital budgetand the strategy of better labor utilization also look promising.

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. The company directly competes with 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 #4 Rank, implying a short-term (1-3 months) Sell rating.

 
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