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Twin Contracts for Jacobs

Zacks Equity Research

Jacobs Engineering Group Inc. (JEC) was awarded a contract for the improvement in traffic flow along with safety on a state highway from the Texas Department of Transportation (TxDOT).

The project work entails rendering engineering and environmental services on the Interstate Highway 820 and State Highway 121 in Fort Worth, Texas, for expansion of the existing highway through the introduction of tolled managed lanes. The total cost related to the project is estimated to be $160 million, with roughly $15.7 million allocated for the contract.

The contract is expected to be executed in phases to minimize the possibility of shortage of funds at any given point of time.

In another press release, the company declared yet another contract win. The second deal is with Reliance Industries Limited in India. The contract, with an undisclosed value, includes providing engineering and procurement services to a cracker complex at the refining and petrochemical complex in Jamnagar, Gujarat in India. The company’s offices in Mumbai will be responsible for the execution of the contract.

This adds up to a series of four contracts for Jacobs, received in the first 15 days of 2013. The contract wins make us optimistic about the company’s future; while the results for the first quarter of fiscal 2013, slated for release in a week’s time, are still awaited.

Jacobs is one of the world's largest and most diverse providers of technical, professional and construction services. We currently maintain a Neutral recommendation on the stock. Jacobs also bears a Zacks Rank #3 (Hold). Its peers Willdan Group (WLDN) and National Technical Systems Inc. (NTSC) hold a Zacks Rank #2 (Buy).

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