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Jacobs Engineering Group Inc. (J - Free Report) reported mixed results for fourth-quarter fiscal 2023 (ended Jun 30, 2023), with earnings missing the Zacks Consensus Estimate but revenues surpassing the same.
Earnings and revenues increased on a year-over-year basis, backed by solid performance across the portfolio. It also reported a solid backlog thanks to a robust opportunity set, led by People and Places Solutions’ operating profit growth of nearly 12% year over year.
Shares of this construction and technical services company fell 3.49% in the pre-market trading session on Nov 21, 2023, following its earnings release.
Earnings & Revenue Discussion
For the reported quarter, adjusted earnings of $1.90 per share lagged the consensus estimate of $2.02 by 5.9%. The reported figure was up 5.6% from the year-ago figure of $1.80 per share.
Jacobs Solutions Inc. Price, Consensus and EPS Surprise
Jacobs’ revenues totaled $4.29 billion, which topped the consensus mark of $4.14 billion by 3.7% and grew 10.5% year over year. Adjusted net revenues were up 8.9% year over year (7.3% in constant currency).
Adjusted operating profit grew 10.3% to $383 million from a year ago. The adjusted operating margin of 11% expanded by 14 basis points (bps).
Adjusted EBITDA rose 9.6% to $384 million and adjusted EBITDA margin improved 10 bps year over year.
The backlog at the end of fiscal 2023 amounted to $29.1 billion, up 4% from a year ago.
Segment Details
Revenues from the CMS segment of $1.24 billion increased by 6.9% year over year. The segment’s operating profit was up 26.4% to $103 million from a year ago, with a margin expansion of 128 bps to 8.3%. The backlog at the fiscal fourth-quarter end was $8.264 billion, up from $7.622 billion a year ago.
Revenues from the People & Places Solutions or P&PS segment totaled $2.51 billion, which increased by 12.7% year over year. Net revenues (excluding Pass-Through Revenue) were up by 10.5% year over year. Its operating profit grew 11.7% from the prior-year quarter to $256 million and the margin rose by 16 bps to 15%. The backlog at the quarter’s end was $17.35 billion, up from $17.01 billion a year ago.
Revenues from the Divergent Solutions segment totaled $251.9 million, which grew 4% year over year. Divergent Solutions’ net revenues were up 2.8% year over year. Segment operating profit improved 57.9% from the prior-year quarter to $24 million. Its operating margin of 10.1% also grew 350 bps year over year. The backlog at the quarter’s end was $3.183 billion, up from $2.957 billion a year ago.
PA Consulting generated $288.2 million in revenues, up 13.3% from the year-ago quarter’s period. Its operating profit was $59 million, up 20.5% from $49 million a year ago. Its operating margin improved by 122 bps to 20.6%. The quarter-end backlog amounted to $311 million, up from $269 million a year ago.
Fiscal 2022 Highlights
Total revenues of $16.34 billion grew 10% year over year. Adjusted net revenues grew 7% year over year and 8.8% at constant currency.
Adjusted EPS was $7.20, an increase of 3.9% from fiscal 2022. Adjusted EBITDA grew 5.3% to $1.44 billion and 7% at constant currency. Adjusted EBITDA margin was 10.8% year over year.
Balance Sheet & Cash Flow
At the fiscal 2023 end, Jacobs had cash and cash equivalents of $926.6 million, down from $1,140.5 million at the fiscal 2022 end. Long-term debt decreased to $2.81 billion at the fiscal 2023-end from $3.36 billion as of fiscal 2022-end.
Net cash provided by operating activities totaled $974.8 million in the quarter compared with $474.7 million in the year-ago quarter. Free cash flow was $837.3 million during the year.
Fiscal 2024 Guidance
Jacobs expects adjusted EBITDA between $1,530 million and $1,600 million, up 9% from the previous year, considering the mid-point. It anticipates adjusted earnings within $7.70-$8.20 per share, up 10%year-over-year at the mid-point.
Fluor Corporation (FLR - Free Report) reported stellar results for third-quarter 2023, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased from the previous year's levels, given solid demand for its engineering and construction solutions.
Given the company’s positive advances on large Energy Solutions projects and continued progress on projects in our legacy portfolio, Fluor lifted its expectations for 2023.
Quanta Services Inc. (PWR - Free Report) reported better-than-expected results for third-quarter 2023, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. Both metrics were up on a year-over-year basis.
The company continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
AECOM (ACM - Free Report) reported decent fourth-quarter fiscal 2023 results, with earnings meeting the Zacks Consensus Estimate and revenues topping the same. On a year-over-year basis, the top and bottom lines increased, backed by double-digit organic net service revenues (“NSR”) growth in its design business.
For the next year, ACM anticipates generating 8-10% organic NSR growth. The company expects adjusted EPS in the range of $4.35-$4.55. This indicates a 20% improvement from the fiscal 2023 levels on a constant-currency basis, considering the mid-point of the guidance.
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Jacobs (J) Misses Q4 Earnings Estimates, Gives Solid '24 View
Jacobs Engineering Group Inc. (J - Free Report) reported mixed results for fourth-quarter fiscal 2023 (ended Jun 30, 2023), with earnings missing the Zacks Consensus Estimate but revenues surpassing the same.
Earnings and revenues increased on a year-over-year basis, backed by solid performance across the portfolio. It also reported a solid backlog thanks to a robust opportunity set, led by People and Places Solutions’ operating profit growth of nearly 12% year over year.
Shares of this construction and technical services company fell 3.49% in the pre-market trading session on Nov 21, 2023, following its earnings release.
Earnings & Revenue Discussion
For the reported quarter, adjusted earnings of $1.90 per share lagged the consensus estimate of $2.02 by 5.9%. The reported figure was up 5.6% from the year-ago figure of $1.80 per share.
Jacobs Solutions Inc. Price, Consensus and EPS Surprise
Jacobs Solutions Inc. price-consensus-eps-surprise-chart | Jacobs Solutions Inc. Quote
Jacobs’ revenues totaled $4.29 billion, which topped the consensus mark of $4.14 billion by 3.7% and grew 10.5% year over year. Adjusted net revenues were up 8.9% year over year (7.3% in constant currency).
Adjusted operating profit grew 10.3% to $383 million from a year ago. The adjusted operating margin of 11% expanded by 14 basis points (bps).
Adjusted EBITDA rose 9.6% to $384 million and adjusted EBITDA margin improved 10 bps year over year.
The backlog at the end of fiscal 2023 amounted to $29.1 billion, up 4% from a year ago.
Segment Details
Revenues from the CMS segment of $1.24 billion increased by 6.9% year over year. The segment’s operating profit was up 26.4% to $103 million from a year ago, with a margin expansion of 128 bps to 8.3%. The backlog at the fiscal fourth-quarter end was $8.264 billion, up from $7.622 billion a year ago.
Revenues from the People & Places Solutions or P&PS segment totaled $2.51 billion, which increased by 12.7% year over year. Net revenues (excluding Pass-Through Revenue) were up by 10.5% year over year. Its operating profit grew 11.7% from the prior-year quarter to $256 million and the margin rose by 16 bps to 15%. The backlog at the quarter’s end was $17.35 billion, up from $17.01 billion a year ago.
Revenues from the Divergent Solutions segment totaled $251.9 million, which grew 4% year over year. Divergent Solutions’ net revenues were up 2.8% year over year. Segment operating profit improved 57.9% from the prior-year quarter to $24 million. Its operating margin of 10.1% also grew 350 bps year over year. The backlog at the quarter’s end was $3.183 billion, up from $2.957 billion a year ago.
PA Consulting generated $288.2 million in revenues, up 13.3% from the year-ago quarter’s period. Its operating profit was $59 million, up 20.5% from $49 million a year ago. Its operating margin improved by 122 bps to 20.6%. The quarter-end backlog amounted to $311 million, up from $269 million a year ago.
Fiscal 2022 Highlights
Total revenues of $16.34 billion grew 10% year over year. Adjusted net revenues grew 7% year over year and 8.8% at constant currency.
Adjusted EPS was $7.20, an increase of 3.9% from fiscal 2022. Adjusted EBITDA grew 5.3% to $1.44 billion and 7% at constant currency. Adjusted EBITDA margin was 10.8% year over year.
Balance Sheet & Cash Flow
At the fiscal 2023 end, Jacobs had cash and cash equivalents of $926.6 million, down from $1,140.5 million at the fiscal 2022 end. Long-term debt decreased to $2.81 billion at the fiscal 2023-end from $3.36 billion as of fiscal 2022-end.
Net cash provided by operating activities totaled $974.8 million in the quarter compared with $474.7 million in the year-ago quarter. Free cash flow was $837.3 million during the year.
Fiscal 2024 Guidance
Jacobs expects adjusted EBITDA between $1,530 million and $1,600 million, up 9% from the previous year, considering the mid-point. It anticipates adjusted earnings within $7.70-$8.20 per share, up 10%year-over-year at the mid-point.
Zacks Rank
Jacobs currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some Recent Construction Releases
Fluor Corporation (FLR - Free Report) reported stellar results for third-quarter 2023, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased from the previous year's levels, given solid demand for its engineering and construction solutions.
Given the company’s positive advances on large Energy Solutions projects and continued progress on projects in our legacy portfolio, Fluor lifted its expectations for 2023.
Quanta Services Inc. (PWR - Free Report) reported better-than-expected results for third-quarter 2023, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. Both metrics were up on a year-over-year basis.
The company continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
AECOM (ACM - Free Report) reported decent fourth-quarter fiscal 2023 results, with earnings meeting the Zacks Consensus Estimate and revenues topping the same. On a year-over-year basis, the top and bottom lines increased, backed by double-digit organic net service revenues (“NSR”) growth in its design business.
For the next year, ACM anticipates generating 8-10% organic NSR growth. The company expects adjusted EPS in the range of $4.35-$4.55. This indicates a 20% improvement from the fiscal 2023 levels on a constant-currency basis, considering the mid-point of the guidance.