Jacobs announces slight uptick in Q3 revenue, extensive diversity-inclusion plan

Dive Brief:

Dallas-based Jacobs Engineering Group yesterday reported third quarter revenue of $3.3 billion, up 2.9% from the same time period a year ago. Backlog increased by $1.2 billion to $23.7 billion, up 5% year over year.
The company also announced an improved fiscal 2020 outlook, increasing its adjusted EBITDA outlook to a range of $1 billion to $1.5 billion from $950 million to $1.5 billion and increasing adjusted earnings to a range of $5.05 to $5.30 per share, up from the prior guidance range of $4.80 to $5.30 per share.
In addition, Jacobs said it launched a global initiative to build on its inclusion and diversity strategy, in direct response to recent social and racial injustices.

Dive Insight:

CEO Steve Demetriou said that during the third quarter, Jacobs has been focused on responding to COVID-19 challenges in the regions where it operates, noting that the situation continues to be fluid, with dramatic variability from location to location.

“Our business, which at its core, solves highly technical scientific-based challenges across a variety of sectors, proved its resiliency in one of the most abrupt global disruptive shocks that we have experienced,” he said yesterday during the firm's quarterly earnings announcement.

Part of the company’s resiliency is driven by the fact that it works in “high-value sectors” of the global economy, such as national security, water infrastructure, the environment, healthcare and life sciences, he said.

Other factors helping the company to hold steady this quarter include economies of scale that provide the ability to quickly adjust to global changes in demand and manage cost structure, a quick transition to the virtual work, careful management of discretionary spending and the firm’s ability to proactively work with clients to overcome physical distancing requirements, he said.

Company officials are optimistic that its infrastructure work will soon see a boost from Congress by way of more stimulus money and/or passage of the FAST Act, which authorizes funding for the country’s highway and public transportation projects and expires Sept. 30. But, Demetriou said, even without legislative action, Jacobs has a solid backlog of programs and projects that are approved and funded and are part of current state budgets.

Although the company raised its outlook for the rest of 2020, Demetriou cautioned that coronavirus-related challenges are not over. “COVID-19 will continue to impact us in the fourth quarter of 2020 and likely provide challenges into fiscal year 2021,” he said.

Also announced at the meeting, the company’s Action Plan for Advancing Justice and Equality outlines a range of key commitments and actions focused on diversity and inclusion. They include:

Providing leadership development programs to accelerate advancement for Black employees to mid- and senior-level leadership.
Requiring senior leaders to sponsor and mentor two diverse employees (one of whom must be Black), ensuring global reach of mentoring opportunities and accountability for success.
Further strengthening diversity of the Board of Directors, including Black representation.
Increasing representation of Black employees at all levels over the next three years to proportionally reflect the overall external population, and provide continuous professional development and advancement.
Training the company’s 55,000-person global workforce in Bystander Intervention by the end of FY21.
Requiring inclusion and diversity as a priority in senior leaders' annual performance plan tied to compensation for accountability.
Adding Martin Luther King, Jr. Day as a holiday for employees. Also actively encourage employees to engage in volunteer opportunities around racial equality and justice, and drive adoption of MLK Jr. Day in the industry.
Donating $10 million over the next five years in support of Black educational and professional development and scholarship opportunities.
Materially increasing women- and minority-owned supplier and vendor spending over the next five years; expand Jacobs' Mentor-Protégé program with local subcontractors, suppliers and professional services firms to encourage more women and minority firm engagement and growth.

“This action plan is about achieving true equality for all our employees, current and future, with a priority now on ensuring Black employees have unquestionable equal opportunity and the tools needed to advance and achieve their ultimate goals at Jacobs,” Demetriou said.