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Jacobs (J) to Report Q1 Earnings: What's in the Offing?

Zacks Equity Research
·4 mins read

Jacobs Engineering Group Inc. J is scheduled to report first-quarter fiscal 2020 results on Feb 4, before the opening bell.

In the last reported quarter, the company’s earnings and revenues beat the Zacks Consensus Estimate by 15.6% and 2.4%, respectively. On a year-over-year basis, earnings and revenues of this leading provider of professional, technical and construction services also grew 29.8% and 13.4%, respectively.

Markedly, Jacobs surpassed earnings estimates in 10 of the trailing 12 quarters.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has decreased 1.6% to $1.20 over the past 30 days. Nonetheless, the estimated figure indicates an increase of 53.9% from 78 cents per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $3.32 billion, suggesting a 7.6% increase from the year-ago reported figure of $3.08 billion.

Jacobs Engineering Group Inc. Price and EPS Surprise

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

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

Factors to Note

Jacobs’ fiscal first-quarter earnings are expected to have increased, courtesy of its transformed portfolio, focus on continued innovation, solid project execution, and diversification into new high-margin growth opportunities.

Jacobs’s People & Places Solutionsor PPS segment (comprising 64.3% of total revenues) is expected to have benefited from its strength in capitalizing on more economically-resistant end markets such as infrastructure, water management, and environmental remediation. The company’s technological edge in infrastructure, water management and environmental remediation provided strength to Jacobs in the period of a macro slowdown.

The Critical Mission Solutions or CMS segment (comprising 35.7% of total revenues) is expected to have benefited from the U.S. federal government's increased focus on defense, energy, intelligence community and NASA. Its strength in critical federal service agencies such DoD and NASA, and ability to gain share through advanced technological applications and efficiencies are likely to reflect on the upcoming quarterly results. Moreover, integration benefits from KeyW are likely to have supported the segment.

In a nutshell, Jacobs’ prudent cost-management efforts and improved project execution are likely to reflect on fiscal first-quarter bottom line. Its efforts toward increasing the share of higher-margin backlog, and dependence on recurring revenues and rebid wins are likely to have boosted its profitability to some extent.

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Jacobs this time around. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive surprise. This is not the case here, as you will see below.

Earnings ESP: The company has an Earnings ESP of -2.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Jacobs currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

North American Construction Group Ltd. NOA has an Earnings ESP of +14.29% and carries a Zacks Rank #1.

Installed Building Products, Inc. IBP has an Earnings ESP of +3.09% and carries a Zacks Rank #2.

Louisiana-Pacific Corporation LPX has an Earnings ESP of +30.00% and holds a Zacks Rank #3.

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