Jacobs (JEC 70.84, +3.75, +5.6%) trades to six-month highs
on Monday in response to solid fiscal year 2019 guidance and an equally strong
third quarter report.
The engineering company gave a solid forecast for the upcoming fiscal year, and investors appear to be liking the company’s trajectory. Jacobs provided an initial outlook on fiscal 2019, earlier than its normal cadence, given the lack of historical pro forma results and seasonality of the newly combined organization. As a result, fiscal 2019 adjusted earnings per shares (EPS) is expected to be in the range of $5.00-5.40. This guidance is ahead of market expectations at the midpoint.
Management further clarified that given Jacobs’ strong performance year to date, the company now expects fiscal 2018 adjusted EPS to be at the high end of its previous outlook of $4.00-$4.40.
The favorable FY19 commentary and the guidance that results would top the company’s previous outlook in FY18 stems from Jacobs’ solid performance in its latest quarter wherein the company reported Q3 EPS of $1.35 on revenue growth of 65.3% year/year to $4.16 bln.
Breaking down the revenue growth, Jacobs saw sales in its Aerospace, Technology, Environmental, and Nuclear segment expand 100% to $1.22 bln in Q3. What’s more, revenue growth of 70% in the Buildings, Infrastructure, and Advanced Facilities group saw sales rise to $1.71 bln in the quarter.
Management noted that just one year since the company announced the CH2M acquisition, its integration is tracking ahead of plan, and the company has increased its cost synergies target to $175 mln from $150 mln.
The company’s strong results and favorable guidance have construction and engineering peers EXPO +2.23%, ACM +1.58%, TISI +1.48%, MDR +1.42%, MG +1.17%, PWR +0.77%, GVA +0.75%, and FLR +0.63% all higher.
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