Irving Oil Extends Jacobs' Contract

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Construction and engineering company, Jacobs Engineering Group Inc. (JEC), boasts high customer satisfaction rate which enables it to generate a large percentage of repeat businesse. Per the company, around 65% of the work obtained is through long-term relationship, which is reflected in the 94% repeat business done in the fiscal third quarter of 2013.

Recently, the company was awarded an extension by the privately-held Irving Oil, to continue providing maintenance services at the Irving Oil Refinery in Saint John, New Brunswick, Canada. The two-year extension comes with two five-year extension options. The terms of the contract were, however, not disclosed.

The new contract is an extension of more than two decades of association between the two companies. Per the contract awarded in 1991, Jacobs was providing turnaround and small capital construction services in addition to day-to-day maintenance services. The extension entitles Jacobs to provide new services like erecting scaffold materials and providing fabrication services along with the previous services.   

For the quarter ended Jun 2013, Jacobs’ revenues from the Oil and Gas-Upstream market reached $261.1 million, reflecting an increase of 7.8% year over year, mostly led by the contribution from the Canadian market. Jacobs sees high growth potential in Canada, given the huge revenue generation from Oil and Gas-Upstream market.

Jacobs is one of the leading providers of professional, technical and construction services to industrial, commercial and governmental clients. The company provides its services through more than 200 offices and subsidiaries located principally in North America, Europe, Asia and Australia.

This Zacks Rank #2 (Buy) company has a market capitalization of $7.6 billion. Other stocks worth a watch in the industry include Fluor Corporation (FLR), KBR, Inc. (KBR) and Quanta Services, Inc. (PWR). All these companies carry a Zacks Rank #2.

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