Twin Contract Wins for Jacobs - Analyst Blog
June 13 2012 - 7:15AM
Zacks
Jacobs Engineering Group
Inc’s (JEC) growing popularity has earned the company two
more contracts recently, one from the Sadara Chemical Company and
another from the Port of Houston Authority.
As per the terms of the agreement
with Sadara, Jacobs will provide engineering, procurement and
construction management (EPCM) services for the construction of the
former’s three polyethylene trains.
A joint venture between Saudi
Arabian Oil Company and The Dow Chemical Company, Sadara aims to
build one of the largest integrated chemical facilities in the
world. With its venue at Jubail Industrial City in Saudi Arabia,
the complex will have 26 manufacturing units- all expected to be
fully operational by 2016.
The other contract from the Port of
Houston Authority requires Jacobs to provide engineering services
for rehabilitation of Wharves 1 & 2. The contract, expected to
be completed by 2014, is likely to fetch more than $50 million for
construction and $4.9 million for designing for Jacobs.
Strategic contract wins, like the
ones mentioned above, and acquisitions across geographies and
services are all in the positive direction and contribute
enormously to Jacob’s growth story, fuelling expansion in the
quarters ahead. Further, steady backlog, roughly at $15.1 billion
at the end of second quarter 2012, and better labour utilization
will accelerate growth and enable multiple expansions.
The current Zacks Consensus
Estimate for the second quarter is 75 cents, representing a year-
over-year increase of 5.95%. Estimates for fiscal years 2012 and
2013 are $2.90 and $3.35, reflecting a year-over-year growth of
9.33% and 15.71%, 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 provides
stiff competition to other industry players including Fluor
Corporation (FLR) and Foster
Wheeler AG (FWLT).
We currently maintain a Neutral
recommendation on Jacobs. The stock also bears a Zacks #3 Rank,
which implies 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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