Engineering and construction company,
Jacobs Engineering Group Inc.
) recently won a contract from
Royal Dutch Shell Plc.
), 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
Meritage Homes Corporation
). 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
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