Jacobs Solutions (NYSE: J) reported mixed results for the quarter, with adjusted earnings beating expectations but revenue falling short of what Wall Street had predicted.
Investors were not enthused, sending Jacobs shares down 6% as of 1:30 p.m. ET.
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A “clean-up” quarter
Jacobs provides engineering and construction services on big-ticket commercial projects. The company earned $1.43 per share in its fiscal second quarter ending March 28, topping expectations by $0.05 per share, but revenue of $2.91 billion was about $90 million shy of the consensus estimate.
The company said it is seeing strong demand for life sciences, transportation, and energy programs, but noted that earnings were hit due to a mark-to-market loss on its investment in Amentum, the government services company that acquired Jacobs’ government business in 2024.
Jacobs will exit its retained stake in Amentum on May 30, distributing its remaining shares to current investors.
The company repurchased $351 million worth of shares in the quarter, while also retiring more than $300 million in debt and refinancing another $700 million at a lower rate.
Is Jacobs stock a buy?
Jacobs’ backlog of future business totaled $22.2 billion at quarter-end, up 20% year over year. The company booked about $1.10 in the quarter for every $1 it billed out to customers, a good sign for future growth.
Jacobs is a company that can build things that few others can, and with long-term demand for infrastructure renewal and talk of domestic construction it should be well positioned for future growth. With the stock down 10% year to date, this could be a good time for investors to consider Jacobs.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
