Jacobs Engineering Group Inc. (JEC) is set to report fiscal first-quarter 2014 results on Jan 22 after the market closes. Last quarter, the company posted a 3.45% negative surprise. Let’s see how things are shaping up for this announcement.
Factors to Consider This Quarter
Jacobs has been growing through various contract wins. In the to-be-reported quarter, the company won contracts in various regions across the globe. Moreover, the satisfaction rate Jacobs provides to its customers is reflected in the repeat business the company generates. As per the company, on an average, around 65% of work is obtained through long-term relationship with customers, reflected in the 94.1% repeat business done in fiscal fourth-quarter 2013.
Moreover, exiting the fourth quarter of fiscal 2013, Jacobs’ backlog was $17.2 billion, an 8.2% year-over-year increase. This reflects a healthy measure on the company’s performance.
Earnings Whispers?
Our proven model shows that Jacobs is likely to beat earnings since it has the appropriate combination of the following two key ingredients:
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +4.11%. This indicates a likely positive earnings surprise.
Zacks Rank #3 (Hold): This increases the predictive power of ESP. The combination of its Zacks Rank and Earnings ESP assures us of a positive earnings surprise in the to-be-reported quarter.
Stocks with Zacks Ranks of #1, 2 or 3 have significantly higher chances of beating the earnings estimate. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Other Stocks to Consider
Here are some other companies in the basic materials sector you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:
Standard Pacific Corp. (SPF) with Earnings ESP of +21.43% and a Zacks Rank #2 (Buy)
KB Home (KBH) with Earnings ESP of +28.57% and a Zacks Rank #3
Meritage Homes Corporation (MTH) with Earnings ESP of +2.97% and a Zacks Rank #3
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