Jacobs Wins Contract For Navy's Intelligent Asset Management

Jacobs Engineering Group (NYSE:JEC) has received a contract from the U.S. Navy to provide operation and maintenance services, in support of their intelligent asset management.

The contract has a maximum value of $241.7 million and also incorporates seven one-year options.

Jacobs’ Aerospace, Technology, Environmental and Nuclear or ATEN unit will provide improved operation and maintenance know-how to enhance infrastructure availability and reliability. The company will support their Naval Station Mayport and Marine Corps Support Facility Blount Island in Jacksonville, FL, along with other areas supported by Naval Facilities Engineering Command Southeast.

The company’s ATEN business has been 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. In fact, the segment’s revenues grew more than 69% and operating profit increased 50.9% during the first nine months of 2018.

The ongoing contract wins highlight Jacobs’ efforts to earn high-end and differentiated ATEN work. Jacobs is benefiting from major government customers across the Department of Defense, Department of Energy, intelligence community and NASA.

Meanwhile, Jacobs’ overall backlog, as of Jun 30, 2018, grew 47% year over year. Particularly, for the ATEN segment, backlogs were up 57.2%. The company, which is slated to report fiscal fourth-quarter results on Nov 20, 2018, has been performing pretty well of late, generating higher revenues and profits courtesy of ongoing contract wins, increased focus on high-value businesses and efficient project execution.

Share Price Performance

Shares of Jacobs, a Zacks Rank #2 (Buy) company, have broadly outperformed the industry over a year. Its shares have gained 25.4% against the industry’s decline of 7.7% 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 average of 15.4%. Also, earnings estimates for the current year have moved up by 0.5% in the past 30 days, signaling analysts’ optimism surrounding the stock’s earnings growth prospect.



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Armstrong Flooring, EMCOR and KBR’s earnings for the current year are expected to increase 114.3%, 20%, and 1.3%, respectively.

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