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Jacobs (J) Beats on Q3 Earnings Estimates, Narrows EPS View
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Jacobs Solutions Inc. (J - Free Report) reported mixed results for third-quarter fiscal 2024 (ended Jun 28, 2024). Earnings surpassed the Zacks Consensus Estimate, but revenues lagged the same. Nonetheless, both earnings and revenues increased on a year-over-year basis.
The quarterly performance is mainly driven by portfolio optimization, focusing on high-growth sectors that emphasize sustainability and infrastructure resilience. This reflects the company's broad-based strength in global infrastructure and sustainability investment. Moreover, gross profit in backlog continued to improve 5.5% year over year, which provides visibility in the fiscal 2024 outlook and beyond.
Meanwhile, the company has narrowed its guidance for fiscal 2024 adjusted earnings per share (EPS).
Shares of this construction and technical services company inched up 0.4% in the pre-market trading session on Aug 6, following the news release.
Detailed Discussion
J reported adjusted EPS of $1.96, which beat the consensus estimate of $1.95 by 0.5%. The reported figure was up 11.4% from the year-ago figure of $1.76 per share.
Jacobs Solutions Inc. Price, Consensus and EPS Surprise
Jacobs’ total revenues of $4.23 billion missed the consensus mark of $4.38 billion by 3.5% but inched up 1.1% year over year. Adjusted net revenues were also up 0.7% year over year.
Adjusted operating profit grew 6.9% to $386 million from a year ago. The adjusted operating margin of 11.3% expanded 66 basis points (bps) year over year. Adjusted EBITDA increased 10.6% year over year to $392 million, and adjusted EBITDA margin expanded 103 bps year over year to 11.5%.
The backlog at the end of third-quarter fiscal 2024 amounted to $30.6 billion, up from $28.9 billion a year ago. Book-to-bill was 1.29x at the third quarter of fiscal 2024-end.
Segment Details
Revenues in the P&PS segment totaled $2.56 billion, which increased 3.8% year over year. Adjusted net revenues (excluding Pass-Through revenue) were up by 4.8% year over year. Its operating profit grew 12% from the prior-year quarter to $271 million, and the margin improved 95 bps to 15.3%. The backlog at the quarter’s end was $19.28 billion, up from $17.5 billion a year ago.
Revenues in the CMS segment of $1.16 billion decreased 2.9% year over year. The segment’s operating profit was up 1.2% to $100 million from a year ago, with a margin expansion of 35 bps to 8.7%. The backlog at the fiscal third-quarter end was $8.45 billion, up from $8.1 billion a year ago.
Revenues in the Divergent Solutions segment totaled $222.8 million, which decreased 6.9% year over year. Divergent Solutions’ adjusted net revenues were down 11.2% year over year. Segment operating profit declined 40.4% from the prior-year quarter to $12 million. Its operating margin of 6.4% also fell 315 bps year over year. The backlog at the quarter’s end was $2.52 billion, down from $2.97 billion a year ago.
PA Consulting generated $288.3 million in revenues, up 0.5% from the year-ago quarter period. Its operating profit was $63 million, up 3.3% from a year ago. Its operating margin improved 60 bps year over year to 21.8%. The quarter-end backlog amounted to $369 million, up from $355 million a year ago.
Balance Sheet & Cash Flow
At the fiscal third-quarter end, Jacobs had cash and cash equivalents of $1.21 billion, up from $926.6 million at the fiscal 2023-end (Sep 29, 2023). Long-term debt decreased to $2.09 billion at the fiscal third-quarter end from $2.81 billion at the fiscal 2023-end.
Net cash provided by operating activities totaled $858.1 million in the first nine months of fiscal 2024 compared with $755.4 million in the year-ago period. The free cash flow was $444.9 million during the reported period versus $290.2 million a year ago.
Fiscal 2024 Guidance Updated
J has narrowed the bottom-line guidance while maintaining the year-over-year growth rate projection at the midpoint. It now anticipates adjusted EPS within $7.85-$8.05 versus $7.80-$8.10 predicted earlier, depicting 10% year-over-year growth at the midpoint.
Jacobs still expects adjusted EBITDA between $1.54 billion and $1.585 billion, reflecting 9% growth from the previous year, considering the midpoint.
Quanta Services Inc. (PWR - Free Report) reported mixed results for second-quarter 2024, wherein adjusted earnings missed the Zacks Consensus Estimate, but revenues surpassed the same. Both metrics increased on a year-over-year basis.
Quanta's performance in the second quarter marks a strong base for the rest of 2024, characterized by impressive growth across key metrics. Moreover, the company has raised its 2024 guidance for major metrics, owing to the expected contributions from its recent acquisition of CEI.
KBR, Inc. (KBR - Free Report) reported mixed second-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
KBR performed well across key metrics and expects this trend to continue for the rest of the year. Driven by robust performance in its core business, KBR raised its adjusted EBITDA and cash flow guidance for 2024.
Fluor Corporation (FLR - Free Report) reported mixed results for second-quarter 2024, with earnings missing the Zacks Consensus Estimate but revenues beating the same. On a year-over-year basis, both earnings and revenues increased, given solid contributions from the Urban Solutions segment.
In the second half of 2024, FLR will focus on deploying resources to its high-value project backlog and positioning the company to return capital to shareholders.
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Jacobs (J) Beats on Q3 Earnings Estimates, Narrows EPS View
Jacobs Solutions Inc. (J - Free Report) reported mixed results for third-quarter fiscal 2024 (ended Jun 28, 2024). Earnings surpassed the Zacks Consensus Estimate, but revenues lagged the same. Nonetheless, both earnings and revenues increased on a year-over-year basis.
The quarterly performance is mainly driven by portfolio optimization, focusing on high-growth sectors that emphasize sustainability and infrastructure resilience. This reflects the company's broad-based strength in global infrastructure and sustainability investment. Moreover, gross profit in backlog continued to improve 5.5% year over year, which provides visibility in the fiscal 2024 outlook and beyond.
Meanwhile, the company has narrowed its guidance for fiscal 2024 adjusted earnings per share (EPS).
Shares of this construction and technical services company inched up 0.4% in the pre-market trading session on Aug 6, following the news release.
Detailed Discussion
J reported adjusted EPS of $1.96, which beat the consensus estimate of $1.95 by 0.5%. The reported figure was up 11.4% from the year-ago figure of $1.76 per share.
Jacobs Solutions Inc. Price, Consensus and EPS Surprise
Jacobs Solutions Inc. price-consensus-eps-surprise-chart | Jacobs Solutions Inc. Quote
Jacobs’ total revenues of $4.23 billion missed the consensus mark of $4.38 billion by 3.5% but inched up 1.1% year over year. Adjusted net revenues were also up 0.7% year over year.
Adjusted operating profit grew 6.9% to $386 million from a year ago. The adjusted operating margin of 11.3% expanded 66 basis points (bps) year over year. Adjusted EBITDA increased 10.6% year over year to $392 million, and adjusted EBITDA margin expanded 103 bps year over year to 11.5%.
The backlog at the end of third-quarter fiscal 2024 amounted to $30.6 billion, up from $28.9 billion a year ago. Book-to-bill was 1.29x at the third quarter of fiscal 2024-end.
Segment Details
Revenues in the P&PS segment totaled $2.56 billion, which increased 3.8% year over year. Adjusted net revenues (excluding Pass-Through revenue) were up by 4.8% year over year. Its operating profit grew 12% from the prior-year quarter to $271 million, and the margin improved 95 bps to 15.3%. The backlog at the quarter’s end was $19.28 billion, up from $17.5 billion a year ago.
Revenues in the CMS segment of $1.16 billion decreased 2.9% year over year. The segment’s operating profit was up 1.2% to $100 million from a year ago, with a margin expansion of 35 bps to 8.7%. The backlog at the fiscal third-quarter end was $8.45 billion, up from $8.1 billion a year ago.
Revenues in the Divergent Solutions segment totaled $222.8 million, which decreased 6.9% year over year. Divergent Solutions’ adjusted net revenues were down 11.2% year over year. Segment operating profit declined 40.4% from the prior-year quarter to $12 million. Its operating margin of 6.4% also fell 315 bps year over year. The backlog at the quarter’s end was $2.52 billion, down from $2.97 billion a year ago.
PA Consulting generated $288.3 million in revenues, up 0.5% from the year-ago quarter period. Its operating profit was $63 million, up 3.3% from a year ago. Its operating margin improved 60 bps year over year to 21.8%. The quarter-end backlog amounted to $369 million, up from $355 million a year ago.
Balance Sheet & Cash Flow
At the fiscal third-quarter end, Jacobs had cash and cash equivalents of $1.21 billion, up from $926.6 million at the fiscal 2023-end (Sep 29, 2023). Long-term debt decreased to $2.09 billion at the fiscal third-quarter end from $2.81 billion at the fiscal 2023-end.
Net cash provided by operating activities totaled $858.1 million in the first nine months of fiscal 2024 compared with $755.4 million in the year-ago period. The free cash flow was $444.9 million during the reported period versus $290.2 million a year ago.
Fiscal 2024 Guidance Updated
J has narrowed the bottom-line guidance while maintaining the year-over-year growth rate projection at the midpoint. It now anticipates adjusted EPS within $7.85-$8.05 versus $7.80-$8.10 predicted earlier, depicting 10% year-over-year growth at the midpoint.
Jacobs still expects adjusted EBITDA between $1.54 billion and $1.585 billion, reflecting 9% growth from the previous year, considering the midpoint.
Zacks Rank
Jacobs currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Quanta Services Inc. (PWR - Free Report) reported mixed results for second-quarter 2024, wherein adjusted earnings missed the Zacks Consensus Estimate, but revenues surpassed the same. Both metrics increased on a year-over-year basis.
Quanta's performance in the second quarter marks a strong base for the rest of 2024, characterized by impressive growth across key metrics. Moreover, the company has raised its 2024 guidance for major metrics, owing to the expected contributions from its recent acquisition of CEI.
KBR, Inc. (KBR - Free Report) reported mixed second-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
KBR performed well across key metrics and expects this trend to continue for the rest of the year. Driven by robust performance in its core business, KBR raised its adjusted EBITDA and cash flow guidance for 2024.
Fluor Corporation (FLR - Free Report) reported mixed results for second-quarter 2024, with earnings missing the Zacks Consensus Estimate but revenues beating the same. On a year-over-year basis, both earnings and revenues increased, given solid contributions from the Urban Solutions segment.
In the second half of 2024, FLR will focus on deploying resources to its high-value project backlog and positioning the company to return capital to shareholders.