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Released November 23, 2016 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Despite an overall decline in revenues and profits in its fiscal fourth quarter, executives at engineering, procurement and construction (EPC) firm Jacobs Engineering Group (NYSE:JEC) (Pasadena, California) are generally optimistic going into fiscal 2017, following a massive restructuring, a shift in the U.S. political climate and a recent jump in Australian business. Industrial Info is tracking more than $98 billion in active projects globally involving Jacobs.
Net earnings were reported to be $29.64 million, down less than 1% from fiscal fourth-quarter 2015, after revenues fell 15.28% to $2.64 billion. Jacobs faced $63 million in after-tax restructuring and other charges, including $36 million attributed to restructuring activities that began in fiscal-year 2015, and $17 million associated with the divestiture of its French subsidiary. During the summer, Jacobs announced it had entered a share purchase agreement to transfer operations within its Jacobs France subsidiary to NOX SARL (Saint Herblain, France).
Jacobs' backlog now stands at $18.76 billion, slightly down by $46 million from the same period last year. EPC companies have expressed rosier outlooks following the election earlier this month of Donald Trump, who vowed during his campaign to significantly boost infrastructure spending; Jacobs already was set to benefit from the recent U.S. Highway Bill, passed in December 2015. But doubts remain about how much of Trump's agenda could pass Congress and actually be enacted. For more information, see November 16, 2016, article - AECOM Sees Promise in Trump's Pledges on Infrastructure, and November 21, 2016, article - Is Trump's Election Too Little, Too Late for Electric Utilities?.
Industrial Info is tracking $3.04 billion in U.S. transportation-related projects involving Jacobs, $2.57 billion of which are under construction. These include Sound Transit's (Seattle, Washington) $2.1 billion Northgate Link light rail extension in Seattle, Washington, which is expected to extend Seattle's light-rail system more than four miles north from the University of Washington to the urban village of Northgate, and the $142 million Morgan's Point/Barbours Cut container terminal expansion in Houston, Texas, which will bring the 34-year-old facility up to date with the booming Gulf Coast energy industry. For more information, see Industrial Info's project reports on the Seattle rail and Houston terminal plans.
Perhaps Jacobs' biggest bright spot is Australia, where the federal government has been promoting its "Smart Cities Plan" to boost infrastructure investment, including more than $3.4 billion in urban rail projects across the country. Two proposed projects, still in their planning phases, are the $370.8 million freight rail line from Calvert to Kagaru in Queensland, and the $103.6 million rail-line upgrade from Heidelberg to Rosanna in Victoria. For more information, including current schedules and other companies involved, see Industrial Info's project reports on the Queensland and Victoria rail plans.
"Australia's infrastructure market is particularly buoyant right now," said Patrick Hill, the senior vice president of Buildings and Infrastructure for Jacobs, in a press release earlier this month. "This is driven by increases in population, congestion, and demand for livable cities. Our recent appointment on a number of major projects confirms our expertise in addressing these and related transport infrastructure challenges."
Industrial Info is also tracking $2 billion in Australian Metals & Minerals Industry projects involving Jacobs, although most of the highest-valued ones, such as Rio Tinto Limited's (NYSE:RIO) (London, England) proposed, $1.45 billion Koodaideri iron ore mine and processing facility in Newman, Western Australia, are highly unlikely to begin construction any time in the next few years due to low commodity prices. For more information on the Newman mine, which is designed to produce 40 million tons per year of direct-shipping ore, see Industrial Info's project report.
While executives expect 2017 to remain challenging, they expect Jacobs to continue reinvesting in growth projects and further benefit from restructuring savings.
"While facing significant market challenges throughout fiscal-year 2016, we implemented a global realignment into four lines of business and successfully executed against a significant restructuring and cost reduction initiative," said Steve Demetriou, the chairman and chief executive officer of Jacobs, in a quarterly press release. "Although certain global markets continue to face economic headwinds, we are now pivoting to sales growth and believe our more efficient cost structure, end-market diversity and margin focus will result in increased profitability in full-year 2017."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Net earnings were reported to be $29.64 million, down less than 1% from fiscal fourth-quarter 2015, after revenues fell 15.28% to $2.64 billion. Jacobs faced $63 million in after-tax restructuring and other charges, including $36 million attributed to restructuring activities that began in fiscal-year 2015, and $17 million associated with the divestiture of its French subsidiary. During the summer, Jacobs announced it had entered a share purchase agreement to transfer operations within its Jacobs France subsidiary to NOX SARL (Saint Herblain, France).
Jacobs' backlog now stands at $18.76 billion, slightly down by $46 million from the same period last year. EPC companies have expressed rosier outlooks following the election earlier this month of Donald Trump, who vowed during his campaign to significantly boost infrastructure spending; Jacobs already was set to benefit from the recent U.S. Highway Bill, passed in December 2015. But doubts remain about how much of Trump's agenda could pass Congress and actually be enacted. For more information, see November 16, 2016, article - AECOM Sees Promise in Trump's Pledges on Infrastructure, and November 21, 2016, article - Is Trump's Election Too Little, Too Late for Electric Utilities?.
Industrial Info is tracking $3.04 billion in U.S. transportation-related projects involving Jacobs, $2.57 billion of which are under construction. These include Sound Transit's (Seattle, Washington) $2.1 billion Northgate Link light rail extension in Seattle, Washington, which is expected to extend Seattle's light-rail system more than four miles north from the University of Washington to the urban village of Northgate, and the $142 million Morgan's Point/Barbours Cut container terminal expansion in Houston, Texas, which will bring the 34-year-old facility up to date with the booming Gulf Coast energy industry. For more information, see Industrial Info's project reports on the Seattle rail and Houston terminal plans.
Perhaps Jacobs' biggest bright spot is Australia, where the federal government has been promoting its "Smart Cities Plan" to boost infrastructure investment, including more than $3.4 billion in urban rail projects across the country. Two proposed projects, still in their planning phases, are the $370.8 million freight rail line from Calvert to Kagaru in Queensland, and the $103.6 million rail-line upgrade from Heidelberg to Rosanna in Victoria. For more information, including current schedules and other companies involved, see Industrial Info's project reports on the Queensland and Victoria rail plans.
"Australia's infrastructure market is particularly buoyant right now," said Patrick Hill, the senior vice president of Buildings and Infrastructure for Jacobs, in a press release earlier this month. "This is driven by increases in population, congestion, and demand for livable cities. Our recent appointment on a number of major projects confirms our expertise in addressing these and related transport infrastructure challenges."
Industrial Info is also tracking $2 billion in Australian Metals & Minerals Industry projects involving Jacobs, although most of the highest-valued ones, such as Rio Tinto Limited's (NYSE:RIO) (London, England) proposed, $1.45 billion Koodaideri iron ore mine and processing facility in Newman, Western Australia, are highly unlikely to begin construction any time in the next few years due to low commodity prices. For more information on the Newman mine, which is designed to produce 40 million tons per year of direct-shipping ore, see Industrial Info's project report.
While executives expect 2017 to remain challenging, they expect Jacobs to continue reinvesting in growth projects and further benefit from restructuring savings.
"While facing significant market challenges throughout fiscal-year 2016, we implemented a global realignment into four lines of business and successfully executed against a significant restructuring and cost reduction initiative," said Steve Demetriou, the chairman and chief executive officer of Jacobs, in a quarterly press release. "Although certain global markets continue to face economic headwinds, we are now pivoting to sales growth and believe our more efficient cost structure, end-market diversity and margin focus will result in increased profitability in full-year 2017."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
