Dive Brief:
- Jacobs announced Tuesday it earned $164.24 million in its fiscal third quarter of 2023, about a 16% drop from $195.98 million in profits a year ago, according to the company’s earnings report.
- Revenue for its third quarter jumped to $4.19 billion compared to $3.83 billion in the prior year, up more than 9%, due to strong momentum from trends such as critical infrastructure, water scarcity, energy transition and onshoring, according to Bob Pragada, Jacobs CEO.
- The Dallas-based company reported that its backlog remains near record levels at $28.92 billion, close to a 3% rise from last year. That increase primarily stems from its People and Places Solutions segment, which focuses on semiconductor, EV and life sciences facilities.
Dive Insight:
Jacobs continues to make progress on its plan to spin off its Critical Missions Solutions business, which will result in two independent companies once complete, said Pragada.
The CMS business provides consulting services to government agencies in the national security, space, nuclear remediation and 5G technology sectors, and it represented about 35% of company revenues last year, according to Jacobs.
“Notably, our growth is entirely organic,” said Pragada during a Tuesday earnings call. “Our pipeline continues to grow faster than our top line, which provides visibility and confidence in our expectations that growth will persist at current rates.”
Despite that spinoff, Jacobs’ People and Places Solutions accounted for about 51% of net revenue in the third quarter, and continues to post “strong revenue and operating profit results,” said Jacobs CFO Kevin Berryman. Work in that segment includes:
- Transportation (including EV charging stations).
- Water infrastructure.
- Defense and government buildings.
- Energy transition.
- Health and life sciences.
- Advanced manufacturing.
Takeaways from earnings
Jacobs’ third quarter earnings played out relatively close to expectations, said Matt Arnold, industrial analyst with financial services firm Edward Jones, in a research note.
“We think the separation of the CMS business makes sense and focuses the company on its strongest assets,” said Arnold. “The remaining company will have strong positions in infrastructure consulting and advanced facility design.”
For example, the firm recently won a $200 million award to manage facility design and support construction on an EV battery facility expansion for Cirba Solutions, a Charlotte, North Carolina-based battery materials company. The award means Jacobs continues to build on its vehicle manufacturing, transit decarbonization, power generation and supply project work.
Meanwhile, the company last month also announced Luce Bassetti as its Americas Coastal Resilience Director. The move further indicates Jacobs’ interest to expand its water infrastructure and climate adaptation work.
