Jacobs Engineering Group Inc. (JEC) received a contract from Hyundai Engineering Co., Ltd. (HEC) to license and design its proprietary SUPERCLAUS® technology for a desulphurization unit at a new gas plant in Turkmenistan. However, the contract or investment value was not disclosed.
South Korea-based HEC will design and build the new gas plant, which is scheduled to be operational in 2012. Gas produced from this plant will be supplied to China. Turkmenistan’s natural gas reserves, with estimates ranging from 4 to 14 trillion cubic meters, are the fourth largest in the world.
Jacobs introduced SUPERCLAUS® technology in 1985 and now has over 200 units in operation. The technology eliminates sulphur from the production process, resulting in cleaner fuels with minimal gaseous emissions and lower energy consumption.
Jacobs’ diversification in terms of markets, geography and services will continue to facilitate future growth.
Jacobs is among those infrastructure stocks that may benefit from the coming construction boom. Looking ahead, as banks get healthy and start lending, investors can expect infrastructure projects to increase. Jacobs expects full-year 2010 earnings per share in the range of $2.00 to $2.60.
Jacobs’ cost-control initiatives help to deliver superior technical, professional and construction services safely, efficiently and within the cost and time parameters of the clients.
Moreover, Jacobs’ ongoing acquisition strategy will help to strengthen its position in future. However, the very cyclical nature of its business and its heavy dependence on third parties are discouraging. Thus, we maintain an Underperform rating on Jacobs.
Read the full analyst report on “JEC”
Read the full analyst report on “HEC”
Zacks Investment Research
