Jacobs Solutions, Inc.’s J consortium with Mott MacDonald is selected by the West Yorkshire Combined Authority (The CA) as the Design Development Partner for the next phase of the West Yorkshire Mass Transit Programme.
The West Yorkshire Mass Transit Programme, one of the largest urban transit schemes in the U.K., aims to connect communities across the region with an advanced, high-capacity public transport system integrated with cycling, walking and rail.
Per the deal, the Jacobs - Mott MacDonald consortium will support The CA in further developing the first phases of the mass transit program, which includes Light Rapid Transit. The scope of work includes completing the existing concept design and providing all professional services and technical support to deliver the network's first phase before the end of this decade.
The CA anticipates the early construction stage will begin in 2028, in which phase one will include two lines serving Leeds and Bradford.
Post completion, The CA will continue to work with local authorities on future phases of a mass transit network to reach other parts of West Yorkshire.
Some Critical Infrastructure Projects Delivered by J
J has been winning some critical infrastructure projects of late. Jacobs, ranked as No. 2 in Transportation by Engineering News-Record, delivers world-class, mass transportation infrastructure solutions that connect people and communities.
Some of the major projects include the Elizabeth Line and the Transpennine Route Upgrade in the U.K., Klang Valley Mass Rapid Transit in Malaysia and the Metropolitan Transportation Authority's Grand Central Madison program in New York.
Jacobs’ Project Execution Solid
Jacobs' ability to execute projects efficiently has been pivotal in driving the company's performance in recent quarters. The continuous success in securing new contracts stands as evidence of this proficiency.
The solid project execution efforts are supported by its ongoing backlog growth. At the fiscal third-quarter end, the company reported a backlog of $30.6 billion, up from $28.9 billion a year ago. Book-to-bill was 1.29x at the third quarter of fiscal 2024-end. This reflects persistent solid demand for Jacobs' consulting services.
People & Places Solutions’ backlog was $19.28 billion, up from $17.5 billion reported in the year-ago period. The backlog at the Critical Mission Solutions segment was $8.45 billion, up from $8.1 billion a year ago.
J’s Stock Performance
Shares of this Zacks Rank #4 (Sell) company have gained 7.3% in the past year compared with the Zacks Technology Services industry’s 69.8% growth. The company’s prospects are marred by increased costs and higher restructuring & other charges.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Jacobs revealed that in the first nine months of fiscal 2024, the direct cost of contracts increased 5.1% year over year due to the ongoing inflationary pressures of labor, materials and other related expenses. Also, an increase in other department spends, personnel costs and unfavorable foreign currency translation are added headwinds.
That said, Jacobs and other companies like Fluor Corporation FLR, Quanta Services, Inc. PWR and KBR, Inc. KBR are expected to benefit from strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply chain investments.
A Brief Discussion of the Above-Mentioned Stocks
Fluor: FLR is benefiting from the strong demand trends for its services demonstrated by the robust prospect pipeline. Fluor’s focus on the new strategy, Building a Better Future, bodes well. With the recent rate cut, the company’s demand trends are likely to witness further enhancement in the upcoming period.
Recently, it reported lower-than-expected results for third-quarter 2024. Earnings missed the Zacks Consensus Estimate and declined from the prior year with lower-than-expected contributions from the Energy Solutions segment. Revenues also missed the consensus mark but increased from the previous year.
Quanta: The company has benefited from sustained demand for infrastructure services, particularly in renewable energy and power grid development. By capitalizing on key megatrends, it has positioned itself as a leader in advancing the transition to sustainable energy solutions and driving technological innovations.
Recently, it reported mixed results for the third quarter of 2024, wherein adjusted earnings beat the Zacks Consensus Estimate, but revenues missed the same.
KBR: The company is capitalizing on growth in high-end defense engineering, classified intelligence, and international programs within its GS business, along with increased contributions from technology sales, engineering, and professional services in the STS business. KBR's efforts to drive both organic and inorganic growth across its segments are yielding positive results. Its focus on value-enhancing acquisitions, strategic partnerships, and delivering shareholder value is promising.
Recently, it reported mixed third-quarter fiscal 2024 results, with adjusted earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
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