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Jacobs to Design Commercial Waste Building for NARS' Project

Zacks Equity Research

Jacobs Engineering Group Inc. J has won a consulting and design services work from the Sacramento County Department of Waste Management and Recycling (“DWMR”). Per the contract, Jacobs will serve a new commercial waste building at the North Area Recovery Station (“NARS”) — a full service solid waste drop-off facility — in North Highlands, CA.

To address continuous increase in waste quantities and meet requirements of California Senate Bill (SB) 1383, which aims at reducing greenhouse gases and increasing organic waste recycling, DWMR requires a new commercial waste building by 2021. Notably, this fast-track project will provide critical infrastructure to DWMR.

Jacobs along with a subcontractor — JR Miller & Associates (JRMA) — as well as public and private waste management providers will assist DWMR with the design of the enclosed commercial waste building and its supporting infrastructure. Meanwhile, this commercial waste building will receive organic wastes and commercially collected municipal solid waste.

The contract creates an opportunity for Jacobs to provide sustainable, adaptable infrastructure to achieve the recycling, upcycling and re-use objectives of the circular economy.

Jacobs People & Places Solutions’ (“PPS”) senior vice president and Global Environmental Market director, Jan Walstrom, stated, "Our design will incorporate construction phasing to meet the accelerated schedule while minimizing impacts to existing operations."

Jacobs Contract Winning Spree Continues

PPS segment – which contributed 64.3% to total revenues — serves clients of broad sectors like water, transportation, building and semiconductors. The segment has been a major growth driver for the company.

Last week, the unit received a contract from the Queensland Government for the Cross River Rail project in Brisbane, Australia. Per the terms, Jacobs and its partners — CPB Contractors, UGL and AECOM ACM — are entitled to deliver the package that includes the design and reconfiguration of the rail network at either end of the new cross city tunnels, supply and installation of supporting rail systems, integration of Cross River Rail into Queensland Rail's existing network as well as completion of seven station upgrades.

Also, the unit received a contract from the U.S. Environmental Protection Agency to provide architect engineer services to the Great Lakes National Program Office. Under the five-year Great Lakes Architect Engineer Services II contract, PPS will provide contaminated sediment characterization and remedial design activities, habitat restoration evaluation and design along with contaminated sediment and habitat restoration remedial construction oversight.

Price Performance

Shares of Jacobs have surged 53.7% in the past year compared with the industry's 17% rise. The upside can be primarily attributed to robust segmental performances, ongoing contract wins and strong backlog. It is also backed by an impressive earnings surprise history. Notably, the company has a trailing four-quarter positive earnings surprise of 2.8%, on average. The company’s earnings surpassed estimates in three of the last four quarters.



Notably, Jacob’s solid project execution strategy and strategic focus on transitioning from engineering and construction to global technology-forward solutions bode well.

Zacks Rank & Key Picks

Currently, Jacobs carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Construction sector are North American Construction Group Ltd. NOA and Installed Building Products, Inc. IBP, each sporting a Zacks Rank #1.

North American Construction has three-quarter positive earnings surprise of 8.5%, on average.

Installed Building Products has three-five year expected earnings per share growth rate of 16%.

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