Jacobs Wins Contract from Shell - Analyst Blog


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Engineering and construction company, Jacobs Engineering Group Inc. ( JEC ) recently won a contract from Royal Dutch Shell Plc. ( RDS.A ), along with two other companies, for providing module fabrication services to Shell in North America. The deal spans seven years, with an extension option of three years. The contract value remained undisclosed.

The association between the two companies dates back to as long as 75 years. Shell, with operations in over 80 countries, has been awarding Jacobs contracts in different parts of the world including Australia, Germany, Canada and India. In April this year, Jacobs won a contract from Shell Hong Kong Limited for Shell's Transformer Oil Project based in Hong Kong. The contract value was not disclosed.

The strong bond between the two companies attests Jacobs' long-term relationship strategy with its clients. Per management, a lot of business the company earns is through repeat business from existing clients. On an average, around 65% of the work the company obtains is on grounds of long-standing relationship with its customers, illustrated by the 94.1% repeat business done in the fiscal fourth-quarter 2013.

Jacobs recently reported strong results for fiscal fourth quarter of 2013, with adjusted earnings per share of 84 cents, registering an increase of 5% year over year. Revenues registered a hike of 13% year over year to $3.14 billion.  

This Zacks Rank #3 (Hold) company currently has a market capitalization of $7.7 billion. Some better-ranked stocks in the construction industry include VSE Corp. ( VSEC ) and Meritage Homes Corporation ( MTH ). While VSE Corp. carries a Zacks Rank #1 (Strong Buy), Meritage Homes holds a Zacks Rank #2 (Buy).

JACOBS ENGIN GR (JEC): Free Stock Analysis Report

MERITAGE HOMES (MTH): Free Stock Analysis Report

ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report

VSE CORP (VSEC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: JEC , MTH , RDS.A , VSEC

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