JEC Adds E.ON Contract to its Kitty (FLR) (FWLT) (JEC)

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Jacobs Engineering Group Inc. (JEC) received a strategic contract from E.ON UK (E.ON), to provide engineering services and construction management support at the 2000 megawatt (MW) Coal Fired Ratcliffe-on-Soar Power Station near Nottingham, United Kingdom. The project is a part of E.ON’s ongoing plant life extension program for the power plant at Nottingham. The terms of the deal as well as the contract value have not yet been disclosed.

According to the contract, Jacobs is expected to design system upgrades for the coal-fired power plant in the United Kingdom. The scope of work includes the appraisal of system upgrade requirements; compilation of user requirement specifications; condition surveys; design of system upgrade and replacement projects, as well as procurement and construction management services support.

Over time, Jacobs has been winning strategic contracts from the federal governments of UK, US and beyond and diversifying across the emerging economies. The list of contracts is thus expected to strengthen Jacobs’ position in the infrastructure market. Moreover, the company’s diversification across global infrastructure markets, geographies and services is expected to support steady growth even in a competitive environment.

Of late, Jacobs registered satisfactory third-quarter 2011 financial results with net earnings per diluted share of 71 cents in the quarter and a 9.4% year-over-year revenue growth based on steady backlog and solid prospect list of contracts.

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 maintain a long-term Neutral recommendation on the stock. Jacobs has a Zacks #3 Rank, which translates into a short-term Hold rating (1-3 months).

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