Jacobs Engineering Group Inc. (JEC) signed a 5-year partnership agreement, extendable upto 10 years, with Devon County Council of the United Kingdom for transportation and engineering consultancy services. However, the contract value was not disclosed.
Jacobs will provide transport planning, structural engineering, environmental and waste services, and highways engineering. These multidisciplinary consultancy support services will assist the in-house team from project inception through final design, and the procurement of works contracts.
Jacobs is one of the leading providers of professional, technical, and construction services to industrial, commercial, and governmental clients. Jacobs’ cost control initiative helps it to deliver superior technical, professional, and construction services safely, efficiently, and within the cost and time parameters of its clients.
Moreover, Jacobs’ ongoing acquisition strategy will help it to strengthen its position in future. However, the overall trend in estimate revisions is unfavorable. Over the last 30 days, 9 of the 22 analysts covering the stock have downgraded their estimates for 2010, while only 4 analysts have moved in the opposite direction. The Zacks Consensus Estimate has slightly gone down from $2.38 to $2.37 per share over the last 30 days.
With respect to earnings surprises, Jacobs’ track record has been mixed in the preceding four quarters with two positive and two negative surprises. It produced an average negative earnings surprise of -1.03% over the last four quarters, meaning that it missed the Zacks Consensus Estimate by that measure over the trailing 12 months.
Currently, the Zacks Consensus Estimate for full fiscal 2010 earnings is $2.37 per share, which is slightly below the full fiscal 2009 earnings of $3.21. Jacobs’ business is heavily dependent on third parties for completing many of its contracts, which is discouraging.
Jacobs also operates in a highly competitive environment. Moreover, the very cyclical nature of its business impacts its top-line and bottom-line. This is reflected in its current Zacks #4 Rank (Underperform).
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