Series of contract wins and project awards have always helped
engineering and construction experts like
Jacobs Engineering Group Inc.
) to strengthen its position in the global infrastructure arena.
Recently, the company announced receipt of two strategic contract
awards; one from INEOS Enterprises Limited and the other from the
U.S. Department of Veterans Affairs (VA).
As per the terms of the agreement with INEOS Enterprises, the
company will be engaged in designing and installing two heat
exchangers in a sulfuric acid plant section based in Runcorn,
Cheshire in the United Kingdom. The plant will be featuring Jacobs'
customized proprietary Chemetics® equipment and the equipment is
likely to be assembled at Jacobs' operating unit based in
Pickering, Ontario. The financial terms and conditions of the
agreement have not been disclosed yet.
In addition, according to the deal with U.S. Department of
Veterans Affairs (VA), Jacobs will offer planning and engineering
support services to six Veterans Integrated Service Networks (VISN)
across the United States. The contract with a five-year tenure is
an indefinite delivery/indefinite quantity (IDIQ) award and is
likely to fetch order of approximately $45 million for the
On the same day, the company also reported acquiring a major
stake in DM Petroleum Operations Company (DM) based in New Orleans,
Louisiana. Following the acquisition, both parties would be able to
further diversify their services and drive greater growth in
business. However, the terms of the transaction were unveiled.
Strategic contract wins, like the ones mentioned above, and
acquisitions across geographies and services are all in the
positive direction and contribute enormously to Jacob's growth
prospects, fuelling revenue expansion in the coming quarters.
Additionally, Jacobs' flexible cost structure and impressive track
record of in-time project execution will help it retain its
long-term relationships with its core customers.
The company provides stiff competition to other industry players
Foster Wheeler AG
The current Zacks Consensus Estimate for the second quarter is
75 cents, representing a year- over-year increase of 5.47%.
Estimates for fiscal years 2012 and 2013 are $2.89 and $3.32,
reflecting a year-over-year growth of 9.10% and 14.83%,
respectively. We currently maintain a Neutral recommendation on
Jacobs. The stock also bears a Zacks #4 Rank, which implies a
short-term (1-3 months) Sell rating.
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