Jacobs Q4 Earnings Beat Estimates, Revenues Miss, Stock Rises

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Jacobs Solutions Inc. J reported mixed results for fourth-quarter fiscal 2024 (ended Sept. 27, 2024). Earnings surpassed the Zacks Consensus Estimate, but revenues lagged the same. Nonetheless, both earnings and revenues increased on a year-over-year basis. Shares of this construction and technical services company gained 1.3% in the pre-market trading session, following the earnings release.

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Notably, Jacobs completed the separation of its Critical Mission Solutions (CMS) and portions of Divergent Solutions (i.e., Cyber & Intelligence) through a Reverse Morris Trust with Amentum on Sept. 27, 2024. Jacobs received $911 million in cash after adjustments and retained a 7.5% ownership in Amentum with the potential for an additional 0.5%.

Additionally, $575 million of the 2020 Term Loan Facility and $333 million of revolving credit were repaid, leading to a net-zero impact on cash balances. Jacobs shareholders received 51% of Amentum shares, with a potential increase to 55%, reflecting enhanced value post-transaction.

Jacobs Solutions Inc. Price, Consensus and EPS Surprise

Jacobs Solutions Inc. Price, Consensus and EPS Surprise
Jacobs Solutions Inc. Price, Consensus and EPS Surprise

Jacobs Solutions Inc. price-consensus-eps-surprise-chart | Jacobs Solutions Inc. Quote

Inside Jacobs’ Q4 Results

J reported adjusted earnings per share (EPS) of $1.37, which beat the consensus estimate of $1.36 by 0.7%. The reported figure was up 28% from the year-ago figure of $1.07 per share, depicting stronger operational efficiency.

Jacobs’ total revenues of $2.96 billion missed the consensus mark of $2.99 billion by 1.1% but grew 4.4% year over year. Adjusted net revenues were also up 4.3% year over year.

Adjusted operating profit grew 9.4% to $280 million from a year ago. Adjusted operating margin expanded 73 basis points (bps) from a year ago to 13.2%. Adjusted EBITDA was $289 million (up 12.5% year over year), with a margin of 13.6% (up from 12.6% a year ago).

Fiscal 2024-end backlog increased 22.5% year over year to $21.8 billion, underpinned by strong project wins. The book-to-bill ratio was 1.67x in the quarter, highlighting robust demand and future revenue stability.

Jacobs’ Segment Details

Revenues in the Infrastructure & Advanced Facilities (IA&F) segment totaled $2.67 billion, which increased 4.9% year over year. Adjusted net revenues (excluding Pass-Through revenue) were $1.83 billion, up 4.9% year over year. Its adjusted operating profit grew 12.4% from the prior-year quarter to $219 million, and the margin improved 87 bps to 12%.

The backlog at the quarter’s end was $21.47 billion, up from $17.53 billion a year ago. The segment achieved strong results from critical infrastructure (transportation, cities, and energy projects) and water and environmental projects. Life sciences and advanced manufacturing segments faced temporary headwinds due to an EV battery manufacturer’s bankruptcy, but fiscal 2025 growth is anticipated.

PA Consulting generated $289.4 million in revenues, up 0.5% from the year-ago quarter period. Its adjusted operating profit was $62 million, down 0.5% from a year ago. Its adjusted operating margin, however, improved 41 bps year over year to 21.3%. The quarter-end backlog amounted to $378 million, up from $311 million a year ago.

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