Jacobs' (JEC) High-End Deal Wins Continue to Boost Top Line

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Jacobs Engineering Group Inc.JEC recently won a contract to provide design and engineering services at George R. Brown Convention Center, one of the largest convention centers in Houston. The contract was awarded by Houston First Corporation, a local government corporation.

Jacobs will benefit from a 10-year North Houston Highway Project, which lies in close proximity to the convention center.

With the help of its team that includes Populous, a design firm and OJB, an architecture firm, Jacobs will provide designing and technical services and focus to maximize operations in the convention center.

In conjunction to the contract win, Jacobs won a one-year contract extension worth $137.5 million from NASA's Kennedy Space Center in Florida. The total value of the contract is $818 million and is extended till September 2019.

Per the contract extension, Jacobs will provide advanced R&D, scientific and technical solutions and look after the implementation of key ground system, payload processing and launch system capabilities.

The ongoing contract wins highlight Jacobs' efforts to earn high-end and differentiated Aerospace, Technology, Environmental and Nuclear (ATEN) deals. The segment accounted for more than 29% of its total revenues in the third quarter of 2018. Importantly, the company's ATEN business is executing well and is positioned to deliver double digit year-over-year increase in profits in fiscal 2018, with continued growth in 2019 as well. Meanwhile, the company's backlog as of Jun 30, 2018, was $27.2 billion, marking an increase of 47% year over year.

The company has been performing pretty well of late, generating higher revenues from contract wins, increased focus on high-value businesses and efficient project execution.

Share Price Performance

Shares of Jacobs, a Zacks Rank #2 (Buy) company, have broadly outperformed the industry in a year. Its shares have gained 32.3% against the industry's decline of 2.7% in the said period. The outperformance was backed by a solid earnings surprise history, with the company having surpassed the Zacks Consensus Estimate in each of the trailing four quarters at an average of 15.4%.

Other Stocks to Consider

Other top-ranked stocks in the Construction sector are KBR, Inc. KBR , EMCOR Group, Inc. EME and Dycom Industries, Inc. DY , each carrying a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

KBR surpassed earnings estimates in three of the past four quarters, the average positive surprise being 12.6%.

EMCOR Group's expected earnings growth rate for the current year is 19.9%.

Dycom Industries surpassed earnings estimates in three of the past four quarters, the average positive surprise being 3.4%.

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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
Referenced Symbols: EME , JEC , DY , KBR

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