More Contracts for Jacobs

Zacks

Engineering and construction company, Jacobs Engineering Group Inc. (JEC) recently added more contracts to its existing pipeline. The company won an engineering, procurement and construction management contract from Midway Gold Corp. (MDW), the value of which was not disclosed.

Per the contract, Jacobs will be offering its services for Midway’s Pan Project, which is expected to start production by mid-2014. Construction work in this project will be undertaken using Jacobs’ manpower and equipment with the latter facilitating the construction of buildings, the leach pad, ponds and other mine site infrastructure.

A day earlier, Jacobs won a contract from Honeywell International Inc. (HON), to provide Integrated Project Management Team services. The company’s services will aid Honeywell’s new production plant at Zhangjiagang City, the People’s Republic of China. The contract value remained confidential.

Under this contract, Jacobs will provide basic and detailed design, construction management services, permitting, project controls along with optional commissioning and start-up support. The project is expected to commence in the fourth quarter of 2014.

On the same day, Jacobs received a Technical Consultancy Agreement from EDF Energy Nuclear Generation Limited. The contract entails that Jacobs’ support for EDF Energy’s power station projects in the United Kingdom. The contract will be valid till the end of Dec 2015. The value of this contract too remained undisclosed.

Jacobs’ EDF contract involves the provision of engineering and design services, technical consultancy, safety, and environmental disciplines for EDF Energy’s power stations in U.K.

With such a strong contract pipeline, we expect the company to grow in the coming quarters. Jacobs is expected to release its fiscal fourth-quarter 2013 results on Nov 18. The Zacks Consensus Estimate for the quarter is pegged at 87 cents, reflecting a year-over-year growth of 8.7%. For fiscal 2013, the Zacks Consensus Estimate is $3.26 per share, reflecting a year-over-year growth of 12.1%.

Jacobs currently holds a Zacks Rank #2 (Buy). Another stock worth considering is VSE Corp. (VSEC), which carries a Zacks Rank #1 (Strong Buy).

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Read the Full Research Report on HON
Read the Full Research Report on MDW
Read the Full Research Report on VSEC


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