Jacobs Engineering Group Inc.
) reported weak fiscal first-quarter 2014 (ended Dec 27, 2013)
financial results. Both earnings and revenues fell short of the
Zacks Consensus Estimate.
The company reported first-quarter earnings per share of 71
cents, 6.6% lower than year-ago earnings of 76 cents. The decline
in earnings was primarily due to losses associated with the
Sinclair Knight Merz acquisition. The quarterly earnings missed
the Zacks Consensus Estimate of 73 cents by 2 cents. The earnings
per share also included 5 cents gain related to settlement of a
Excluding 10 cents of acquisition-related loss and 5 cents of
gains related to resolved tax matter, adjusted earnings per share
in the quarter was 76 cents.
Revenues improved 11.2% year over year to $3.07 billion in the
reported quarter, slightly lower than the Zacks Consensus
Estimate of $3.09 billion. The Technical Professional Services
component's revenues came in at $1.67 billion, up from $1.61
billion in the year-ago quarter. The Field Services component's
revenues were $1.40 billion, up from $1.15 billion reported in
the first quarter of fiscal 2013.
: In the reported quarter, direct costs of contracts, a major
expenditure for Jacobs, climbed 12.5% from the year-ago quarter
and settled at $2.62 billion. Selling, general and administrative
(SG&A) expenses came in at $308.6 million, up 12.0% year over
In the quarter, operating margin reached 4.7%, declining 108
basis points year over year.
: Exiting the quarter, backlog stood at $18.0 billion, rising
11.5% from $16.2 billion in the year-ago quarter. It includes
backlog from the Technical Professional Services component of
$12.3 billion versus $10.4 billion at the end of the first
quarter of fiscal 2013, with the remainder coming from the Field
: Jacobs' cash and cash equivalents at the end of fiscal
first-quarter 2014 were approximately $1.01 billion, down from
$1.26 billion recorded at the end of the previous quarter. Total
debt at quarter-end increased to $1.09 billion, compared with
$437.9 million as of Sep 27, 2013. The increase in debt was
mainly a result of debt raised to finance the acquisition of
Sinclair Knight Merz, completed in the reported quarter.
: As per expectations, the first quarter of fiscal 2014 was weak.
However, management predicts ample opportunities to increase
market share as end markets promise significant improvement. For
fiscal 2014, the company reaffirms its earnings per share
expectations in the $3.35 to $3.90 range.
Other Stocks to Consider
Jacobs currently carries a Zacks Rank #2 (Buy). Other stocks
worth a watch in the industry include
Quanta Services, Inc.
Beazer Homes USA Inc.
). All these stocks carry the same Zacks Rank as Jacobs.
BEAZER HOMES (BZH): Free Stock Analysis
FLUOR CORP-NEW (FLR): Free Stock Analysis
JACOBS ENGIN GR (JEC): Free Stock Analysis
QUANTA SERVICES (PWR): Free Stock Analysis
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