Jacobs Engineering Group Inc. (JEC) won a task order contract from the Information Systems and Infrastructure Product Group at Marine Corps Systems Command in Quantico, VA. The order’s value is estimated at $9.7 million through December 2010, with an option for extension of two more years, bringing the total potential value to $29 million.
 
According to the contract, Jacobs will provide technical services at Marine Corps Major Commands and at bases and stations in the United States and overseas. Services for the program manager for Marine Corps Network and Infrastructure Services will cover transition and life cycle sustaining support. It will also involve schedule coordination, data collection and management, requirements management, hardware and software asset management; and other actions necessary to manage and sustain information technology services in the Navy Marine Corps Intranet (NMCI) environment and under the Continuity of Services Contract (COSC).
 
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.
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