JEC Jacobs Engineering Group Inc

Jacobs Engineering Group Inc. (JEC) announced to have received a design and engineering support program (DESP) III prime contract from the Air Force Materiel Command (AFMC) Contracting Directorate.

Since 2005, Jacobs has provided program management, systems and specialty engineering, logistics support and research and development under DESP II contract. As per the new contract, Jacobs will now be providing engineering services to support AFMC weapon systems, components and support equipment.

Further, the contract is anticipated to strengthen the company’s longstanding relationship with the Air Force customers, thereby offering ongoing support to the AFMC mission.

The potential value of this multiple-award indefinite delivery/indefinite quantity (IDIQ) contract is estimated around $1.9 billion over the seven-year period of performance.

Jacobs has been winning strategic contracts from federal governments and other clientele, diversified across services and geographies. Such continuous contract inflow appears favorable for Jacobs in order to maintain a significant market share in the huge global infrastructure market.

The company’s growing international exposure and diversification across markets, geographies and services have given it a competitive edge over its peers, viz. Fluor Corporation (FLR) and Foster Wheeler AG (FWLT).

The company reported its financial results for the first quarter of 2012 with total revenue of $2,631.8 million, up 11.7% year over year. The results were based on solid operational performance on the backdrop of improving markets. We believe that the company’s steady backlog, strategy of better labor utilization alongside improved pricing and a mix shift will accelerate operational efficiencies while raising the company’s future earnings

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

 
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