JEC Jacobs Engineering Group Inc

 

Jacobs Engineering Group Inc. (JEC) won a series of contracts of late which depicts the company’s growing popularity. Of these, the most recent one is a $50 million contract from Teck Metals Ltd.

Jacobs, under the terms of the contract, will design and supply a new sulphuric acid plant at Teck Metals’ Trail operation in Canada. The plant will substitute two existing plants and will enable better operating facilities at the site. Jacobs has been in relationship with Teck Metals over the years and this contract further strengthens the bond between the two companies.

Of late in March 2012, Jacobs was awarded a $137 million contract from NASA to work at its Michoud Assembly Facility, a deal from Vale Canada for designing and supplying a new sulphuric acid plant. In addition, the company won a $1 billion contract from the Metropolitan St. Louis Sewer District (MSD).

The current Zacks Consensus Estimate for the first quarter is 74 cents, representing a year- over-year increase of 17.46%. Estimates for fiscal years 2012 and 2013 are $3.05 and $3.41, reflecting a year-over-year growth of 15.00% and 12.05%, respectively.

Strategic contract wins and acquisitions across geographies and services all bode well for Jacobs and are also expected to fuel growth for the company in the quarter ahead. Further, steady backlog and better labor utilization will accelerate growth and enable multiple expansions.

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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