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Jacobs (J) Q2 Earnings & Revenues Top, View Raised, Stock Up

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Jacobs Engineering Group Inc. J reported second-quarter fiscal 2021 (ended Apr 2, 2021) results, wherein earnings and revenues beat the Zacks Consensus Estimate, driven by solid project execution. In fact, both the metrics surpassed the consensus mark for the fifth consecutive quarter. Following the results, the company’s shares increased 3.6% in the pre-market trading session.

The company’s Chair and CEO Steve Demetriou said, "Our strategic portfolio actions and disciplined execution are delivering continued strong financial results despite headwinds from the pandemic.” He also added. “Our multi-year targeted investments in areas such as environmental resiliency, digitally-enabled infrastructure and space intelligence have now intersected with accelerating global demand.”

Earnings & Revenue Discussion

For the reported quarter, its adjusted earnings of $1.66 per share outpaced the consensus estimate of $1.37 by 21.2%. The figure also improved 19% from the year-ago period.

Jacobs’ revenues totaled $3.55 billion, which surpassed the consensus mark by 1.5% and increased 3.5% year over year. The improvement was driven by healthy segmental performance. Backlog at fiscal second quarter-end amounted to $25.6 billion, up 10% from a year ago.

Jacobs Engineering Group Inc. Price, Consensus and EPS Surprise

Jacobs Engineering Group Inc. Price, Consensus and EPS Surprise
Jacobs Engineering Group Inc. Price, Consensus and EPS Surprise

Jacobs Engineering Group Inc. price-consensus-eps-surprise-chart | Jacobs Engineering Group Inc. Quote

Segment Details

Revenues from the Critical Mission Solutions segment of $1.31 billion increased 5.3% year over year. Backlog at quarter-end was $9.78 billion, up 7% year over year.

Revenues from the People & Places Solutions segment totaled $2.14 billion, which declined 2% year over year. Backlog at quarter-end was $15.5 billion, up 9.6% year over year.

Meanwhile, PA Consulting contributed $98 million of revenues for the fiscal second quarter. Quarter-end backlog amounted to $280 million.

Margins Profile

For the quarter under review, adjusted gross profit increased 18.4% year over year to $767.2 million.

Adjusted operating margin expanded 200 basis points (bps) to 10.5%.

Balance Sheet & Cash Flow

At fiscal second quarter 2021-end, Jacobs had cash and cash equivalents of $893.3 million, up from $862.4 million at the end of fiscal 2020 (ended Oct 2, 2020). Long-term debt increased to $3.42 billion at fiscal second quarter-end from $1.68 billion as of Oct 2, 2020.

The company provided $237.6 million cash for operating activities in the fiscal second quarter compared with $152.2 million in the year-ago period. It generated free cash flow of $209.3 million in second-quarter fiscal 2021 versus $113.1 million a year ago.

Fiscal 2021 Guidance Raised

Buoyed by first-half fiscal 2021 performance and closing of investment in PA Consulting, Jacobs lifted its adjusted EBITDA and EPS guidance. Jacobs now expects adjusted EBITDA between $1,200 million and $1,270 million compared with the prior estimate of $1,075-$1,155 million. Also, it now anticipates adjusted earnings within $6.00-$6.30 per share compared with the earlier estimate of $5.30-$6.00.

The company expects PA Consulting to generate double-digit revenue growth for the fiscal year. Beyond fiscal 2021, the company expects multiple secular growth drivers and efficiency gains, which in turn are likely to support double-digit earnings growth.

Zacks Rank & Peer Releases

Jacobs currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Quanta Services Inc. PWR reported first-quarter 2021 results, wherein adjusted earnings not only surpassed the Zacks Consensus Estimate but also grew impressively on a year-over-year basis. Meanwhile, revenues for the quarter missed the consensus mark and declined on a year-over-year basis.

KBR, Inc. KBR reported first-quarter 2021 results, wherein revenues lagged the Zacks Consensus Estimate but earnings topped the same. Also, the top line declined but earnings improved year over year, given new program wins, innovative technologies, and solid execution and safety performance.

Fluor Corporation FLR reported first-quarter results, with earnings surpassing the Zacks Consensus Estimate but revenues missing the same. Earnings beat the Zacks Consensus Estimate in two of the trailing three quarters, while revenues missed the same for the third consecutive quarter.

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