Jacobs Engineering hopes to sign more long-term government contracts following its December purchase of CH2M, Chairman and CEO Steve Demetriou said Tuesday.
“We recently commenced work on the management and operations contract with the Department of Energy at the Nevada National Security Site, an example of one of these multiyear contracts,” Demetriou said during the Dallas-based company’s quarterly earnings call with financial analysts. Jacobs is part of Honeywell-led Mission Support and Test Services, which last year won a $5 billion, 10-year management contract for the Nevada National Security Site.
Increased spending at agencies such as DOE, NASA, and the Department of Defense should bode well for more such opportunities, he added. The Trump administration has proposed $6.6 billion for DOE Cold War cleanup funding in fiscal 2019. In the recent fiscal 2018 omnibus budget, Congress provided $7.1 billion for this work.
The just-completed earnings period, which marks the second quarter of Jacobs’ 2018 fiscal year, was also the first full quarter of operations since the company completed its $3.27 billion purchase of CH2M. The combined company now has more than 77,000 employees, Jacobs said.
Jacobs Engineering reported $3.9 billion in revenue for the quarter ended March 30, $1.6 billion more than the $2.3 billion the company took in a year ago.
Management reported generally accepted accounting principles net earnings of $49 million, $0.34 per diluted share. That was down from $50 million, $0.41 per share, for the same period in 2017. Tax reform and the CH2M purchase affected the net earnings, Jacobs said.
Jacobs is increasing its earnings outlook for fiscal 2018 to $4 to $4.40 per share on an adjusted basis, up from the prior guidance range of $3.85-to-$4.25.
Jacobs’ Aerospace, Technology, Environmental and Nuclear business, which includes Energy Department cleanup contracts, reported more than $1.1 billion in revenue for the recent quarter, spiking from $602 million during the same period in 2017. The segment is on pace to roll up $4.5 billion in revenue during the current calendar year, Demetriou added. The segment’s operating profit was $61 million, compared to $44 million a year earlier.
The backlog for the sector was $8.8 billion in the most recent quarter, up from $5.6 billion a year ago. The increase is primarily due to new awards from the U.S. government and the CH2M acquisition, Jacobs said in a financial filing following the earnings report.
While not mentioned during the earnings call, management of the troubled Plutonium Finishing Plant demolition at DOE’s Hanford Site in Washington state moved from CH2M to Jacobs. Thanks to the merger, Jacobs is now owner of cleanup contractor CH2M Hill Plateau Remediation.
