Jacobs Engineering Group Inc. (JEC) recently announced winning a $400 million contract from Los Angeles County Department of Public Works. In addition, the company was awarded another contract for a project in Australia. Following the news, the company’s shares gained nearly 1%, closing at $46.70 on Oct 14.
The first contract requires Jacobs to provide its construction management expertise for a project involving multiple facilities at the Rancho Los Amigos National Rehabilitation Center in Downey, CA. Also, the company will render project control and support services pertaining to renovation and construction of buildings.
Secondly, the Australian contract, awarded by the Victorian Government, requires Jacob and other members of the GEO Consortium to build a new prison in Melbourne. Specifically, the company will provide security planning, civil, structural, mechanical, electrical, dry fire, communications and Environmentally Sustainable Design (ESD) services for the Ravenhall prison. Financial terms of the contract were not disclosed. The project is likely to be completed in 2017.
A week earlier, Jacobs received a design management contract from Chesapeake Bay Bridge and Tunnel Commission (CBBT). Financial terms of the transaction were kept under wraps. Further, the company received an option to extend the Test and Operations Support Contract (TOSC) at NASA Kennedy Space Center (KSC) in Florida. The contract option, valued at $172.8 million, will extend the work by two years.
With its strong contract pipeline, Jacobs caters to an array of sectors like oil and gas, petrochemical, mining, IT services and power. The company presently claims a significant share in the huge global infrastructure market, which is expected to grow further in the quarters ahead.
At the time of exiting fiscal third-quarter 2014 (ended Jun 27, 2014), Jacobs' project backlog was $18.5 billion, rising 7.6% from $17.2 billion in the year-ago quarter.
Jacobs is slated to report fourth-quarter fiscal 2014 (ended Sep 2014) results on Nov 14. The Zacks Consensus for the quarter is pegged at 85 cents per share while that for fiscal 2014 and 2015 stand at $3.29 and $3.86 respectively.
With a market capitalization of $6.2 billion, Jacobs Engineering Group currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include CACI International Inc. (CACI), Pernix Group Inc (PRXG) and Quanta Services, Inc. (PWR). While CACI International sports a Zacks Rank #1 (Strong Buy), both Pernix Group and Quanta Services carry a Zacks Rank #2 (Buy).
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