Jacobs Engineering reports Q2 FY2018 earnings growth

Dallas — Jacobs Engineering Group Inc. announced its financial results for the second fiscal quarter ended March 30, 2018.

Highlights:

• Q2 2018 net earnings of $48.6 million, or $0.34 per share, impacted by CH2M acquisition related charges and tax reform
• Q2 2018 adjusted net earnings of $143.9 million up 51 percent year-over-year
• Q2 2018 adjusted EPS of $1.00 per share up 28 percent year-over-year
• Q2 2018 revenue of $3.9 billion grew 16 percent on a pro forma basis year-over-year
• Backlog of $26.5 billion at end of Q2 2018; Jacobs and CH2M backlog increased 9 percent on a pro forma basis year-over-year
• Continued strong gross margin performance of 19.7 percent for the quarter
• On track to deliver on cost synergies with revenue synergy opportunities coming into focus
• Gross debt down sequentially and plan to further decrease leverage
• Successfully aligned to three global business segments to maintain focus on key end market growth opportunities

“We are executing well against our strategic priorities to maintain a winning culture, drive project excellence and grow profitably, which delivered double-digit increases in revenue and gross profit over last year,” said Jacobs Chairman and CEO Steve Demetriou. “We made significant progress integrating CH2M, creating a stronger combined company of more than 77,000 professionals inspired by a singular purpose — delivering advanced solutions for a more connected, sustainable world.”

Demetriou cited positive trends across Jacobs’ three lines of business, “Our Aerospace, Technology, Environmental and Nuclear line of business is making additional inroads into the government services market while maintaining solid profitability. Buildings, Infrastructure and Advanced Facilities continues to post strong growth and we are confident that our more cyclical Energy, Chemicals and Resources businesses are well positioned to benefit as markets recover.”

Kevin Berryman, Jacobs CFO, added, “We are demonstrating how strong execution continues to strengthen our bottom line. Revenue grew 16 percent over last year’s pro forma revenue for Jacobs and CH2M combined. We are tracking on plan to achieve the cost synergies from the CH2M acquisition and remain committed to achieving the run-rate of $150 million of net cost synergies by the end of fiscal 2019.  From a cash flow standpoint, strong business performance mitigated the impact of the one-time costs associated with the acquisition and restructuring costs to deliver synergies, resulting in a decrease in our gross debt compared with Q1. We are confident in our ability to significantly reduce net debt in the second half of fiscal 2018.”

Berryman also cited higher earnings expectations for the year. “Given our strong performance in the first half of fiscal 2018, we are increasing our earnings outlook for fiscal 2018 to $4.00-$4.40 per share on an adjusted basis, up from our previous forecast of $3.85-$4.25.”