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Jacobs (JEC) Secures 12-Month Work Extension at Hanford Site

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Jacobs Engineering Group Inc. received a 12-month contract extension from the Department of Energy (“DOE”) for environmental remediation along the Columbia River and some parts of the Hanford site. This extended Jacobs’ pre-existing 10-year contract through Sep 20, 2019.

Per the contract, Jacobs will continue to provide retrieval of radioactive material, soil and groundwater remediation, as well as waste treatment and disposal. Additionally, it will perform 618-10 Burial Ground re-vegetation, and slab removal of Central Plateau. Jacobs is also entitled to maintain the Fast Flux Test Facility complex, along with treating and disposing off a sodium waste.

Jacobs’ Aerospace, Technology, Environmental and Nuclear or ATEN business (accounting for 29.4% of total revenues) serves global automotive, aerospace, telecommunications, defense, and nuclear clients as well as the intelligence community of the United States.

The ongoing contract wins highlight Jacobs’ efforts to earn high-end and differentiated ATEN work. The company’s ATEN business is executing well and is positioned to deliver double-digit increase in fiscal 2018 profits on a year-over-year basis, with continued strong growth in 2019 as well.

Meanwhile, Jacobs’ overall backlog, as of Jun 30, 2018, was $27.2 billion, increasing 47% year over year. Particularly, for the ATEN segment, backlogs were up 57.2% in the same period.

The company has been performing pretty well of late, generating higher revenues courtesy of ongoing contract wins, increased focus on high-value businesses and efficient project execution.

Share Price Performance

Shares of Jacobs, a Zacks Rank #3 (Hold) company, have broadly outperformed the industry over a year. Its shares have gained 28% compared with the industry’s growth of 1.2% in the said period. The outperformance was backed by a solid earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average of 15.4%. Its revenues grew 47.1% from the year-ago quarter over the first nine months of 2018.



Stocks to Consider

Some better-ranked stocks in the industry are Fluor Corporation (FLR - Free Report) , KBR, Inc. (KBR - Free Report) and Altair Engineering Inc. (ALTR - Free Report) . While Fluor sports a Zacks Rank #1 (Strong Buy), KBR and Altair both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fluor’s earnings for the current year are expected to increase 39.3%.

KBR surpassed earnings estimates in three of the past four quarters, delivering an average positive surprise of 12.3%.

Altair’s earnings are expected to grow 11.5% in 2018.

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