Jacobs Inks GLAES II Contract For Great Lakes Restoration

Jacobs Engineering Group Inc. (NYSE:J) received a contract from the U.S. Environmental Protection Agency to provide architect engineer services to the Great Lakes National Program Office (“GLNPO”).

Under the five-year Great Lakes Architect Engineer Services (“GLAES”) II contract, Jacobs’ People & Places Solutions will provide contaminated sediment characterization and remedial design activities, habitat restoration evaluation and design along with contaminated sediment and habitat restoration remedial construction oversight. Jacobs has been supporting GLNPO as a GLAES contractor since 2011.

In 2003, Jacobs initially started to work for GLNPO under the Region 5 Remedial Action Contract at the Waukegan Harbor Area of Concern (AOC). Since then, the company has supported GLNPO on 41 projects within 20 AOCs, providing technical excellence, responsiveness and high-quality delivery across all aspects of the GLAES II statement of work.

Jacobs People & Places Solutions or PPS business’ Senior Vice President and Global Environmental Market Director, Jan Walstrom, stated, "As a trusted partner with a proven track record of delivering environmental solutions to GLNPO, we look forward to the opportunity to continue to protect and restore the Great Lakes for future generations."

Ongoing Contract Wins Bodes Well

In December 2019, Jacobs JV — Confluence Water Pty Ltd — inked a $1.4-billion deal to provide design, construction, maintenance and facilities management services to Sydney Water's North region. It also received a contract from National Aeronautics and Space Administration (NASA) where PPS will provide Environmental compliance, Environmental remediation and Regulatory risk analysis and communications services to Marshall Space Flight Center.

The PPS segment, which contributed 61.7% to fourth-quarter fiscal 2019 revenues, serves clients of broad sectors like water, transportation, building and semiconductors. The segment has also been a major growth driver for the company.

During fiscal fourth quarter, the segment’s revenues increased 8.8% year over year. Also, backlog at the end of the quarter rose 10% from the year-ago quarter’s period. Notably, the company’s solid project execution strategy and strategic focus on transitioning from engineering and construction to global technology-forward solutions bode well.

Price Performance

Shares of Jacobs have surged 50.4% in the past year compared with the industry's 18.2% rise. The price performance is backed by an impressive earnings surprise history, wherein the company surpassed estimates in three of the trailing four quarters. Also, robust segmental performances, ongoing contract wins and strong backlogs are driving growth.

Zacks Rank & Key Pick

Currently, Jacobs carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Some better-ranked stocks in the Zacks Construction sector are North American Construction Group Ltd. (TSX:NOA) , Installed Building Products, Inc. (NYSE:IBP) and AECOM (NYSE:ACM) . North American Construction and Installed Building Products each sport a Zacks Rank #1, while AECOM carries a Zacks Rank #2 (Buy)

North American Construction has three-quarter positive earnings surprise of 8.5%, on average.

Installed Building Products has three-five year expected earnings per share growth rate of 16%.

AECOM’s 2020 earnings are expected to rise 20.4%.

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