Jacobs (JEC) Boosts Organic Growth On New U.S. Defense Deal

Jacobs Engineering Group Inc. (NYSE:JEC) has lately secured a prestigious five-year contract from the U.S. Department of Defense. Under this $99 million deal, the company’s joint-venture business with EwingCole will be supporting large projects tacked under the Military Construction (MILCON) Program.

Inside the Headlines

U.S. based EwingCole offers premium engineering, interior designing, planning and architecture services. Last year, Jacobs’ joint-venture business with EwingCole had secured a contract from the U.S. Military Academy’s Cadet Barracks Upgrade program.

Jacobs perceives that receipt of the aforementioned deal will further strengthen its long-standing relationship with the American defense department.

Per the agreement, Jacobs’ joint venture will be assisting the programming, planning, designing and construction-related activities at different types of military facilities and buildings in the military installations, positioned all over the Naval Facilities Engineering Command's Southwest Area of Responsibility. These sites will be situated in New Mexico, Utah, Colorado, Nevada, Arizona and California.

Jacobs will be focusing on massive projects under the MILCON Program. This would involve different government facilities, counting those headed by U.S. Marine Corps. and Navy. The joint venture will investigate sites, estimate costs, create programming and planning of assistance documents, conduct technical reviews, and notify means of exiting hazardous materials for these projects.

Jacobs’ Contract-Based Growth Strategy

Over the last year, Jacobs’ shares have rallied 2%, as against 8.4% loss recorded by the industry.

Notably, this Zacks Rank #2 (Buy) stock flaunts a VGM Score of B.

Jacobs provides state-of-the-art engineering and construction management services at competitive prices. This helps the company secure contracts from numerous public and private organizations.

In the last few months, the company has secured several contracts from agencies like the Sasol Group Technology, Chevron Corp. (NYSE:CVX) , U.S. Army, Equate Petrochemical Co., Exxon Mobil Corp. (NYSE:XOM) , Sellafield Ltd, Saudi Aramco, Sipchem Lubrizol, Kraton Corp. (NYSE:KRA) and Codelco. Such potential deals are anticipated to escalate the company's revenues and profit-making prospects in the upcoming quarters.

Over the last 60 days, Zacks Consensus Estimate for the stock has been revised northward for both fiscal 2018 (ending September 2018) and 2019 (ending September 2019). Furthermore, the company’s projected earnings per share growth for fiscal 2018 and 2019 is pegged at 23.8% and 17.8%, respectively.

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