Jacobs (JEC) Wins 10-Year Contract From City Of Waterbury

Jacobs Engineering Group Inc. (NYSE:JEC) recently clinched a 10-year contract valued $62 million from City of Waterbury to operate and maintain wastewater utilities in the city.

Given Jacob’s expertise in operations and asset management, the company will undertake the responsibilities pertaining to water pollution control, collection and other related utilities in Waterbury, CT. The partnership is expected to rake in savings of up to $12.7 million for the city, higher than what was derived under the previous operating model.

Jacobs will also be responsible for monitoring and maintaining equipment and conducting training of staff and supporting operations. The operating plan includes upgrades, adjustments and long-term facility planning.

The company has been performing pretty well of late. It is generating higher revenues from contract wins, increased focus on high-value businesses and efficient project execution. Backed by such positives, shares of Jacobs, a Zacks Rank #2 (Buy) company, have broadly outperformed the industry in a year. Its shares have gained 27.9% against the industry’s decline of 8.1%.

Rationale Behind

The contract win is reflective of Jacob’s ability to execute different projects in the most efficient manner. It also highlights Jacobs’ efforts to earn high-end and differentiated Buildings, Infrastructure and Advanced Facilities (BIAF) deals.

The segment accounted for more than 41% of total revenues in the third quarter of 2018. In the third quarter of 2018, revenues from the segment totaled $1,707.1 million that increased 72.9% year over year. Backlog at the end of the quarter was roughly $11.3 billion, up 75.2% year over year.






As it is, Jacobs leads the global professional services sector, providing solutions for a sustainable environment. It offers a broad array of services, including scientific, technical, professional and construction. It also efficiently manages business programs for industrial, commercial, government and infrastructure sectors. Owing to its leading position, the company recorded $15 billion revenues in fiscal 2017 and the upward trend in revenues in likely to continue.

While the Zacks Consensus Estimate calls for 2018 revenues of $15.1 billion, earnings are expected to grow 35.2% year over year.

Other Stocks to Consider

Other top-ranked stocks in the Construction sector are KBR, Inc. (NYSE:KBR) , EMCOR Group, Inc. (NYSE:EME) and Dycom Industries, Inc. (NYSE:DY) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

KBR surpassed earnings estimates in three of the past four quarters, the average positive surprise being 12.6%.

EMCOR Group’s expected earnings growth rate for the current year is 20%.

Dycom Industries surpassed earnings estimates in three of the past four quarters, the average positive surprise being 3.4%.

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