Jacobs Gears Up to Report Q4 Earnings: Things to Keep in Mind

Core Viewpoint - Jacobs Solutions, Inc. is expected to report its fourth-quarter fiscal 2024 results on November 19, with a consensus estimate for earnings per share (EPS) showing a 9.5% increase year-over-year [1][3]. Financial Performance - In the last reported quarter, Jacobs' earnings exceeded the Zacks Consensus Estimate by 0.5%, while revenues fell short by 3.5%. Year-over-year, adjusted earnings grew by 11.4% and revenues increased by 1.1% [2]. - The Zacks Consensus Estimate for EPS has risen to $2.08 from $2.07 over the past 60 days, compared to $1.90 in the same quarter last year [3]. Revenue Growth Factors - Revenue growth in Q4 is anticipated due to investments from the U.S. Infrastructure Act and other economic incentives, alongside Jacobs' strategic shift towards becoming a technology solutions provider [4]. - The company is expected to benefit from a backlog with higher margins, efficiency improvements through digital advancements, and strong project execution [5]. Segment Performance - The People & Places Solutions (P&PS) segment, which accounted for 58.4% of total revenues in fiscal 2023, is projected to show continued organic growth, driven by a strong backlog in water infrastructure and environmental projects [8]. - The consensus estimate for P&PS revenues is $2.68 billion, up from $2.51 billion year-over-year, with operating profit expected to rise to $286 million from $256 million [9]. - The Critical Mission Solutions (CMS) segment, which represented 28.7% of total revenues in fiscal 2023, is expected to see revenues of $1.243 billion, a slight increase from $1.236 billion a year ago, with operating profit anticipated to grow to $109 million from $103 million [10][12]. Strategic Developments - Jacobs announced plans to separate the CMS business to enhance focus on higher-growth areas, culminating in a merger with Amentum, which was completed on September 27, 2024 [11]. - The PA Consulting segment, accounting for 7.1% of total revenues, is expected to report revenues of $303 million, up from $288 million year-over-year, with operating profit projected to increase to $64 million from $59 million [14]. Cost Management - Jacobs anticipates increased overhead costs related to the separation of CMS, which may temporarily affect segment operating margins but is not expected to impact the overall bottom line [15].