Jacobs (J) Wins U.S. Navy's KB BOSI Contract, Fortifies CMS Unit
Jacobs Engineering Group Inc. J has received a contract from the U.S. Naval Facilities Engineering Command (NAVFAC) to provide base operating support services in the Naval Submarine Base Kings Bay in Georgia and outlying areas.
The contract, known as Kings Bay Base Operations Support I (KB BOSI), will commence on Jun 1, 2021. KB BOSI has a maximum potential award to Jacobs of $421 million over a one-year base period and seven one-year options. Jacobs will serve NAVFAC to provide intelligent asset management solutions to boost infrastructure reliability and availability in the field of force protection, facility management, facility investment, utilities management, electrical, steam, wastewater, water, compressed air, SCADA, telecommunications, chiller plant, transportation, and equipment, environmental and other related services.
Senior Vice President of Jacobs Critical Mission Solutions, Steve Arnette said, " The Kings Bay contract allows Jacobs to leverage its experience and longstanding relationship with the U.S. Navy to support NAVFAC Southeast's critical mission ensuring our countries warfighters have reliable facilities to protect our country.”
Notably, with the latest contract win, Jacobs extended its partnership with the U.S. Navy. Now, it has been delivering intelligent asset management solutions on three contracts, providing base operations services at Naval Station Mayport in Florida, Naval Base Kitsap's West Sound in Washington and now Kings Bay.
Solid Backlog and Share Price Performance
Jacobs’ business has been benefiting from solid contract wins. Backlog at fiscal 2020-end was $23.8 billion, reflecting an increase of 5.5% year over year (up 3% on a pro-forma basis). This reflects persistent solid demand for Jacobs' consulting services. Critical Mission Solutions or CMS’ backlog grew 3% year over year on a pro forma basis to $9.1 billion for fiscal 2020, which provided strong visibility into the base business. People & Places Solutions’ backlog was up 4.2% year over year for fiscal 2020 to $14.7 billion.
Jacobs’ shares have outperformed the industry in the past year. The price performance was backed by an impressive earnings surprise history. Improved segmental performances, solid backlog, acquisitions and a focus on high-value businesses will likely improve Jacobs’ near-term results.
Zacks Rank & Key Picks
Jacobs currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Better-ranked stocks in the Zacks Engineering - R and D Services industry are Gates Industrial Corporation PLC GTES, AECOM ACM and Mayville Engineering Company, Inc. MEC. While Gates Industrial currently sports a Zacks Rank #1, the other two stocks carry a Zacks Rank #2 (Buy).
Gates Industrial is expected to witness 25.7% earnings growth in 2021.
AECOM’s earnings are expected to grow 21.9% this year.
Mayville Engineering’s earnings for 2021 are expected to increase 225.2%.
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