Jacobs Engineering Group Inc
) reported strong fiscal fourth-quarter and full year 2012
(ending September 28, 2012) financial results. Though earnings
came in better than expected, both the quarter's and fiscal 2012
revenues fell short of the Zacks Consensus Estimate.
The company reported fourth quarter earnings per share of 83
cents, beating the Zacks Consensus Estimate of 80 cents. The
quarterly earnings also improved 12.2% from the year-ago earnings
of 74 cents a share.
Fiscal 2012 earnings came in at $2.94 per share, beating the
Zacks Consensus Estimate of $2.91 by 1%. Earnings for fiscal 2012
also increased from the 2011 earnings of $2.60 by 13%.
The company generated a one-time gain of $6.3 million on sale
of its intellectual property for iron ore palletizing and other
related assets. Excluding this impact, the company's non-GAAP
earnings in the reported quarter were 80 cents, whereas earnings
in fiscal 2012 were $2.91, both in line with the Zacks Consensus
Revenue increased 2.6% year over year to $2.72 billion in the
reported quarter. However, it fell short of the Zacks Consensus
Estimate of $2.87 billion by 5.7%. Revenue for fiscal 2012 came
in at $10.89 billion, an increase of 4.91% compared with 2011. It
was 0.9% lower than the Zacks Consensus Estimate of $10.99
Technical Professional Services revenue came in at $1.63
billion, increasing 2.24% from the year-ago quarter. However, the
segment's revenue increased 9.8% to $6.46 billion in fiscal
Field Services revenue in fourth quarter was $1.15 billion, up
2.4% from fourth quarter 2011. However, revenue in fiscal 2012
slipped 1.5% from fiscal 2011 to $4.43 billion.
During the reported quarter, direct costs of contracts, a
major expenditure for Jacobs, edged up 1.86% from the year-ago
quarter to settle at $2,339.6 million. Selling, general and
administrative (SG&A) expenses came in at $279.0 million, up
0.13% year over year.
Operating profit improved to $167.6 million, an increase of
13.3% over the year-ago quarter.
Exiting the fourth quarter, backlog stood at $15.9 billion, an
increase of 11.3% from $14.3 billion in the year-ago quarter. It
includes backlog from technical professional services of $10.3
billion versus $9.1 billion at the end of the fourth quarter of
The company has won a number of contracts in the quarter,
including contracts to support NASA Marshall Space Flight Center
(on July 24, 2012, worth $600 million), a contract from CODELCO
to provide engineering services for a copper mine in Chile (on
August 8, 2012, estimated total installed cost $4.5 billion) and
contract from Methanex to provide engineering, procurement and
construction services in Louisiana (on August 14, 2012, worth
$550 million), among others.
Jacobs' cash and cash equivalents at the end of fourth quarter
were approximately $1,032 million, up 14.0% year over year. Total
debt decreased 7.5% from the previous-year quarter to $528.3
million as of September 28, 2012.
Based on improvement across most markets, encouraging backlog,
increased margins and a stronger balance sheet, Jacobs expects
earnings for fiscal 2013 between $3.00 and $3.50 per share.
Improved earnings in 2012 also allowed management initiate the
fiscal 2013 guidance.
The company competes against industry players including
Foster Wheeler AG
). We currently maintain a Neutral recommendation on Jacobs. The
stock also bears a Zacks #3 Rank, which implies a short-term (1-3
months) Hold rating.
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