It has been about a month since the last earnings report for Jacobs Solutions (J Quick QuoteJ - Free Report) . Shares have added about 2.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Jacobs Solutions due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Jacobs (J Quick QuoteJ - Free Report) Q1 Earnings & Revenues Top Estimates

Jacobs Solutions Inc. reported impressive first-quarter fiscal 2024 (ended Dec 29, 2023) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate.

Earnings and revenues increased on a year-over-year basis, backed by robust organic revenue growth in its P&PS business. This reflects the company's broad-based strength in global infrastructure and sustainability investment.

The company is striving to create a leaner operating model that delivers higher growth and higher margin value for stakeholders. This can be achieved by focusing on disciplined execution and project delivery excellence. Furthermore, J is optimistic about the progress made toward the merger of its CMS and Cyber & Intelligence businesses with Amentum as it looks to establish two independent companies.

Earnings & Revenue Discussion

For the reported quarter, adjusted earnings of $2.02 per share topped the consensus estimate of $1.50. Also, the reported figure was up 28% from the year-ago period.

Jacobs’ revenues totaled $4.16 billion, which topped the consensus mark of $4.01 billion by 3.7% and increased 9.5% year over year. Adjusted net revenues were up 7% year over year (5.4% in constant currency).

Adjusted operating profit declined 3.1% to $322 million from a year ago. The adjusted operating margin of 9.8% contracted 102 basis points (bps) year over year.

Adjusted EBITDA fell 3.1% year over year to $328 million and adjusted EBITDA margin contracted 104 bps year over year to 10%.

The backlog at the end of first-quarter fiscal 2024 amounted to $29.6 billion, up 4.7% from a year ago.

Segment Details

Revenues in the CMS segment of $1.13 billion increased 5% year over year. The segment’s operating profit was up 13.6% to $93 million from a year ago, with a margin expansion of 63 bps to 8.3%. The backlog at the fiscal first-quarter end was $8.311 billion, up from $7.632 billion a year ago.

Revenues in the P&PS segment totaled $2.47 billion, which increased 10.9% year over year. Net revenues (excluding Pass-Through Revenue) were up by 8.4% year over year. Its operating profit declined 0.7% from the prior-year quarter to $225 million and the margin fell 125 bps to 13.7%. The backlog at the quarter’s end was $17.86 billion, up from $17.24 billion a year ago.

Revenues in the Divergent Solutions segment totaled $254.2 million, which increased 18.5% year over year. Divergent Solutions’ net revenues were up 4.7% year over year. Segment operating profit declined 36.7% from the prior-year quarter to $8 million. Its operating margin of 3.6% also fell 236 bps year over year. The backlog at the quarter’s end was $3.110 billion, up from $3.077 billion a year ago.

PA Consulting generated $306 million in revenues, up 8.5% from the year-ago quarter’s period. Its operating profit was $54 million, up 6.7% from $51 million a year ago. Its operating margin fell by 30 bps year over year to 17.8%. The quarter-end backlog amounted to $317 million, up from $306 million a year ago.

Balance Sheet & Cash Flow

At the fiscal first-quarter end, Jacobs had cash and cash equivalents of $1,142.2 million, up from $926.6 million at the fiscal 2023-end (Sep 29, 2023). Long-term debt increased to $2.83 billion at the fiscal first-quarter end from $2.81 billion at the fiscal 2023-end.

Net cash provided by operating activities totaled $418.4 million in the quarter compared with $302.3 million in the year-ago quarter. The free cash flow was $401 million during the fiscal first quarter.

Fiscal 2024 Guidance Maintained

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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Jacobs Solutions has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Jacobs Solutions has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Jacobs Solutions is part of the Zacks Technology Services industry. Over the past month, Seagate (STX Quick QuoteSTX - Free Report) , a stock from the same industry, has gained 8.5%. The company reported its results for the quarter ended December 2023 more than a month ago.

Seagate reported revenues of $1.56 billion in the last reported quarter, representing a year-over-year change of -17.6%. EPS of $0.12 for the same period compares with $0.16 a year ago.

Seagate is expected to post earnings of $0.19 per share for the current quarter, representing a year-over-year change of +167.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Seagate. Also, the stock has a VGM Score of D.