Eight New Contracts for Jacobs – Analyst Blog

Jacobs Engineering Group Inc. (JEC) won contracts from North East of Scotland Transport Partnership (Nestrans), Aberdeen City Council and Aberdeenshire Council, and from Los Angeles World Airports (LAWA).

 

The former is a three-year contract for transportation services and the latter is a $25 million contract for construction services. Jacobs will help Nestrans to provide better connectivity and accessibility within the region.

 

According to the agreement, the three airports owned and operated by LAWA, Los Angeles International Airport (LAX), LA/Ontario International Airport (ONT) and Van Nuys Airport (VNY), will engage Jacobs for various airport and capital improvement projects.

  

Beginning this month, Jacobs received a total of 8 contracts, including the ones above. These contracts will definitely pull Jacobs out of the current sluggish environment. New contract wins are also expected to improve backlog, which has been continuously shrinking since the beginning of fiscal 2010. During the first quarter of fiscal 2010, backlog declined to $14.9 billion from $16.0 billion in the previous quarter. In the second quarter, it declined to $14.7 billion, and in the third quarter to $13.5 billion.

 

Another positive of the company is its robust liquidity position with the net cash position of $847.6 million at the end of third quarter of fiscal 2010.

 

Jacobs’ business is very much cyclical in nature due to a wide variety of uncontrollable factors, including economic conditions and changes in client spending, particularly during periods of economic uncertainty. However, the market is recovering gradually, which is expected to push Jacobs ahead in future.