Jacobs Engineering Group Inc. JEC has received a contract from Highways England under its Specialist Professional and Technical Services (“SPaTS”) framework.
Per the deal, this California-based professional, technical and construction services provider company will support Highways England's existing work to fix Lean culture and techniques in delivering efficiencies for the U.K. taxpayer.
Highways England's Lean group and Jacobs, working together as an integrated team, will carry on transformation of roads within their major projects and maintenance programs.
Highways England is a government body to improve, organize and maintain England's Strategic Road Network for ensuring safe motorways and major A roads connecting the country, in turn driving economic growth.
Jacobs has been working with Highways England since 2010. The recent contract will help Highways England to achieve its target of $1.5 billion of capital efficiency savings over the first road period (2015/16 to 2019/20).
Jacobs’ Buildings, Infrastructure and Advanced Facilities or BIAF segment has been supporting major transportation projects that include full project life cycle transport infrastructure management services. In fact, it assists Highways England's National Infrastructure and Regional Investment Programs, Smart Motorways Program, as well as Transport Scotland and the Welsh Government programs in U.K.
In fiscal 2018, revenues from its BIAF segment, which accounted for more than 41% of the total revenues, increased 61.5% year over year. The upside was backed by $2.22-billion favorable impact from the CH2M acquisition, solid revenue generation across the business, along with strong Life Sciences, Electronics, Water and Transport Infrastructure markets.
Efficient project execution over the last few quarters has been driving Jacobs’ performance. Importantly, backlog of $11.38 billion from the BIAF segment in fiscal 2018 was up 67.6% from the prior-year figure. The impressive growth mainly resulted from new contract wins in Australia and U.S. markets, along with the CH2M acquisition.
Notably, Jacobs’ top and bottom lines both increased significantly in fiscal 2018. Adjusted earnings also increased 38% from the year-ago figure. Further, its revenues totaled $15 billion, reflecting healthy growth of 49.5% from the year-ago level. Backlog at the end of fiscal 2018 was $27.3 billion, 38% higher than the prior fiscal year.
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Meanwhile, shares of Jacobs have outperformed its industry over a year. The outperformance was backed by a solid earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with average of 12.4%.
Zacks Rank & Other Stocks to Consider
Currently, Jacobs carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the Zacks Construction sector include Gates Industrial Corporation PLC GTES, Altair Engineering Inc. ALTR, and Great Lakes Dredge & Dock Corporation GLDD, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Gates Industrial, Altair Engineering and Great Lakes’ earnings for the current year are expected to increase 44.6%, 23.1% and 111%, respectively.
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