Post Earnings Coverage as Jacobs’ Quarterly Adjusted EPS Grew 4%; Re-Affirmed Outlook

Upcoming AWS Coverage on Tetra Tech Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 26, 2017 / Active Wall St. announces its post-earnings coverage on Jacobs Engineering Group Inc. (NYSE: JEC). The Company released its second quarter fiscal 2017 financial results on May 09, 2017. The construction and technical services Company reported better than expected earnings. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Jacobs Engineering Group’s competitors within the Technical Services space, Tetra Tech, Inc. (NASDAQ: TTEK), reported on May 03, 2017, its financial results for Q2 ended April 02, 2017. AWS will be initiating a research report on Tetra Tech in the coming days.

Today, AWS is promoting its earnings coverage on JEC; touching on TTEK. Get our free coverage by signing up to:
http://www.activewallst.com/register/.

Earnings Reviewed

For the three months ended March 31, 2017, Jacobs revenue totaled $2.31 billion, down compared to revenue of $2.78 billion in Q2 FY16. On an adjusted basis, the Company reported revenue of $2.32 billion. Jacobs’ revenue numbers fell short of analysts’ consensus of $2.61 billion.

For Q2 FY17, Jacobs reported gross margin improvement of over 200 basis points versus the prior year, driven by strong project execution and increased focus on more profitable business. The Company noted that as a result of both the margin improvement and cost efficiency, the reported quarter adjusted operating profit of $140 million improved by $18.4 million versus Q2 FY16 and on an adjusted operating profit margin basis, an increase of 165 basis points versus the year earlier same quarter.

Jacobs reported GAAP net earnings of $50 million, or $0.41 per share for Q1 2017 compared to GAAP net earnings of $65 million, or $0.54 per share, for Q2 FY16. The Company’s reported quarter results include approximately $45 million, or $0.37 per share, in after-tax costs associated with its 2015 restructuring as well as other charges associated with the strategic review of its Europe, UK, and Middle-East regional operations. Excluding the restructuring and other charges, Jacobs’ Q2 FY17 adjusted net earnings totaled $95 million, or $0.78 per share, up 4% compared to $91 million, or $0.75 per share, from the corresponding period for 2016. The Company’s earnings exceeded Wall Street’s estimates of $0.71 per share.

Segment Results

For Q2 FY17, Jacobs’ Buildings & Infrastructure business’ sales improved 1.1% on a y-o-y basis to $585.2 million. The segment’s operating profit grew 3.6% versus the year-ago comparable period to $43.99 million, and operating profit margin increased 18 basis points to 7.5%.

Jacobs’ Industrial line of business, meanwhile, saw a 23% decline to $582.46 million, driven in part by the recent completion of several projects and prior to the mobilization on several new field services projects. The overall operating profit for the group improved versus Q2 FY16 due to the year-ago same period being impacted by a litigation settlement and customer bankruptcy. Consequently, operating profit for the group increased by 94% versus the year ago corresponding quarter to $24 million, and operating profit margin rose a significant 227 basis points to 4.1%.

During Q2 FY17, Jacobs’ revenues from Petroleum & Chemicals (P&C) segment slumped 36% to $557.8 million, and continued to experience revenue weakness due to cyclical softness in the industry, primarily driven by lower field service activity. At the operational level, however, the impact of the reduction in revenue was more than offset by a onetime benefit associated with the restructuring of the Company’s P&C-related Indian welfare trust program of $9.9 million and its focus on improving margin mix and project execution. These combined to support a significant 281 basis point improvement on operating profit margin to 6.4%. The Company’s Aerospace & Technology segment’s Q2 FY17 revenue dropped 14% to $577.04 million.

Backlog

As of March 31, 2017, Jacobs’ total backlog was $18.5 billion, including a professional services component of $12.4 billion, compared to total backlog of $18.2 billion and a professional services component of $11.4 billion for the corresponding period last year. The Company reported book-to-bill ratio of 1.02 for a trailing 12-month period, up from 0.94 in the year ago same period.

Cash Matters

Jacobs’ cash flow from operations was $96 million in Q2 FY17. Additionally, during the reported quarter, the Company repurchased 0.9 million shares of its common stock at a total cost of $51 million and paid dividends of $18 million.

On May 05, 2017, Jacobs announced that its Board of Directors has approved and declared a quarterly cash dividend to shareholders. A quarterly dividend of $0.15 per share of Jacobs’s common stock will be paid on June 16, 2017, to shareholders of record on the close of business on May 19, 2017.

Outlook

The Company stated that given its Q2 FY17 and year to date results, its expectations remain unchanged for the year, with a range of total adjusted EPS for the year at $3.00 to $3.30 per share.

Stock Performance

At the close of trading session on Thursday, May 25, 2017, Jacobs Engineering’s stock price marginally declined 0.66% to end the day at $52.59. A total volume of 841.46 thousand shares were exchanged during the session. The Company’s share price has gained 5.14% in the past twelve months. The Company’s shares are trading at a PE ratio of 30.56 and have a dividend yield of 1.14%. The stock currently has a market cap of $6.28 billion.

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