A long-term cleanup contract at the Department of Energy’s Idaho National Laboratory helped lift revenue for Jacobs in the first quarter of fiscal 2023, an executive with the Dallas-based company said this week in an earnings call.
Critical Mission Solutions, the segment where Jacobs coordinates much of its government contracting work, took in roughly $1.08 billion, for the quarter ended Dec. 30. That’s an increase of about $98.4 million from about $976.8 million for the same period last year, chief financial officer Kevin Berryman said during the presentation to Wall Street analysts.
“Q1 revenue [for Critical Mission Solutions] was up 10% year over year,” Berryman said. It was “driven by the Idaho nuclear remediation project contract that wrapped up in Q2 of last year.”
Even so, Critical Mission Solutions operating profit dropped to $82 million during the quarter, which ended Dec. 30, down from $91 million a year ago.
In May 2021, DOE awarded the Idaho contract, potentially worth $6.4-billion over 10 years, to Idaho Environmental Coalition, a partnership of Jacobs and North Wind Portage. The Jacobs-led team officially took over Idaho lab cleanup responsibility from Fluor Idaho on Jan. 1, 2022.
Jacobs leads cleanup teams at the Idaho National Laboratory, the Paducah Site in Kentucky and the West Valley Demonstration Project in New York. It is also a junior partner to Honeywell at the Nevada National Security Site.
Meanwhile, for now, at least, Berryman doesn’t sound too worried about government projects being sidelined from any impasse between the White House and the Republican-led House of Representatives over the debt limit.
The debt ceiling limits how much the feds can borrow to pay bills and make investments. The GOP House leadership wants spending concessions from President Joe Biden before it agrees to increase the current $34-trillion limit, according to media reports.
“Our view is they will come to some rational conclusion on that,” Berryman said. “But we will see how that plays out.”
Likewise, Jacobs bosses said they were not worried about short-term Congressional appropriations levels. “The bottom line is we have an omnibus in place for 2023,” Berryman said. If there is a continuing resolution entering fiscal 2024, which starts Oct. 1, it would likely keep spending at 2023 levels, the financial officer said.
Overall at Jacobs, it was a strong first fiscal quarter of 2023. The company reported earnings from continuing operations of $136 million or $2 million more than the $134 million recorded a year ago, according to its latest quarterly earnings report.
Net earnings per diluted share were $1.07, up 4 cents per share from the year-ago number of $1.03 per share, according to an earnings press release. The report covered the three months ending Dec. 30, the first of Jacobs’ fiscal year.
Quarterly revenue was also up. The company took in $3.8 billion for the period, up $400 million from the $3.4 billion recorded in the first quarter of fiscal 2022.
