Engineering giant Jacobs said Wednesday it took in $3.4 billion in revenue during its fiscal 2020 second quarter, up from the $3.1 billion generated during the same period of 2019, despite moving most of its worldwide workforce to telework.
Thanks to rapid action since the beginning of the crisis, Jacobs expedited the shift of its 55,000-member workforce to remote operations, Chair and CEO Steve Demetriou said in a news release. Most personnel have worked remotely for about two months now, he added.
Demetriou and his management team discussed the quarter’s financial performance in a conference call with Wall Street analysts.
Jacobs’ Critical Mission Solutions division, which provides services at Energy Department nuclear sites and other government work, will earn lower income for the short term because the contracts are dependent on having people physically on-site, executives said.
“These contracts involve highly technical work,” such as Department of Energy remediation and Department of Defense test ranges, where access to the client’s site is required, Demetriou said during the call.
A provision in the federal CARES Act signed into law in March will enable Jacobs to recoup the cost of paid leave for employees who cannot report to federal job sites during the pandemic but cannot telecommute due to the nature of their work, Demetriou said.
The chief executive said he envisions staffing levels returning to more normal levels at DOE nuclear sites over the next few months. Jacobs subsidiary CH2M is the majority partner in the venture that last month won a 39-month extension valued at $243 million for remediation at the West Valley Demonstration Project in New York state. It is also, via CH2M, the outgoing prime for Central Plateau cleanup at the Hanford Site in Washington state and serves as a minority partner in the team managing liquid waste at the Energy Department’s Savannah River Site in South Carolina.
Critical Mission Solutions operating profit amounted to $84 million for the quarter ended March 27, compared to $74 million a year ago.
The company sustained a net loss of $122 million, or $0.92 per share, for its second quarter of fiscal 2020, a steep drop from net earnings of $115 million, or $0.82 per share, for the same period in fiscal 2019. That was largely due to financial accounting for the 2019 sale of its energy and chemicals business to WorleyParsons, according to the earnings material. Jacobs owns $200 million of WorleyParsons stock thanks to the transaction.
The company expects its earnings per share for fiscal 2020 in the range of $4.80 to $5.30.
Most of the company’s business sectors are affected by the coronavirus pandemic, but Jacobs expects recovery to begin in the fourth quarter of the fiscal year, according to its presentation for the call.
The company is not earning its usual level of federal fees because less work is being done, Demetriou said during the call.
On March 6, 2020, Jacobs completed its acquisition of the John Wood Group’s nuclear consulting, remediation, and program management business.
It is important to remember that Jacobs benefits from well-funded government programs that are not going away, but simply having there timelines delayed for a few months, Demetriou said, adding that paid leave will enable the company to keep its workforce together when things start to move forward again.
The CEO expects Jacobs to adapt to a “new normal” by the beginning of the new federal fiscal year on Oct. 1. Jacobs is also providing some clients with important COVID-19 solutions, such as using 3-D printing to make personal protective equipment for healthcare workers, according to earnings materials.
