Dallas — Jacobs Engineering Group Inc. announced its financial results for the third fiscal quarter ending June 30, 2017. Jacobs reported the following highlights:
- Net earnings of $89.0 million, or $0.74 per share;
- Adjusted net earnings of $95.3 million, or $0.79 per share;
- Backlog of $18.6 billion – up $100 million vs. prior quarter and over $200 million a year ago; highest professional services backlog in nine quarters;
- Gross margin improvement of over 150 basis points vs. prior year to 18.3%, driven by strong project execution and increased focus on more profitable business;
- Announced definitive agreement to acquire CH2M – combination unites two industry-leading, innovative companies with highly complementary capabilities.
Jacobs reported net earnings of $89.0 million, or $0.74 per share, on revenue of $2.5 billion for the third fiscal quarter ended June 30, 2017. This compares to net earnings of $69.1 million, or $0.57 per share, on revenues of $2.7 billion for the third fiscal quarter ended July 1, 2016.
Jacobs’ net earnings for the third fiscal quarter 2017 include approximately $6.3 million, or $0.05 per share, in after-tax Restructuring and other charges, mainly associated with the 2015 Restructuring. While the 2015 Restructuring was concluded in fiscal second quarter 2017, certain costs associated with previously identified restructuring actions were recognized this quarter, as previously communicated. Our third fiscal quarter 2016 results included approximately $25.8 million, or $0.21 per share, in charges related to the 2015 Restructuring.
Excluding the Restructuring and other charges above, Jacobs’ adjusted net earnings for the quarter totaled $95.3 million, or $0.79 per share, favorable as compared to $94.8 million, or $0.78 per share, for the corresponding period for 2016.
Our net earnings for the current quarter included $3.5 million, or $0.02 per share, in professional service fees associated with the Company’s announced definitive agreement to acquire CH2M.
Total backlog was $18.6 billion at June 30, 2017, including a professional services component of $12.6 billion, as compared to total backlog of $18.3 billion and a professional services component of $11.9 billion for the corresponding period last year. On a sequential basis, gross profit (and margin) associated with our Q3 backlog continued to improve from our Q2 FY17 levels.
Steve Demetriou, Jacobs Chairman and CEO, commenting on the results for the quarter, said, “I am pleased with our third quarter results which are aligned with our communicated expectations during last quarter’s earnings call. Sequential revenue growth, continued robust gross margin performance, and strong cost discipline supported our year over year improvement. The recently announced CH2M transaction serves as the beginning of the next exciting chapter in the history of Jacobs, and will enhance our strategy to target high growth, high margin business, and reinforce our position as a premier global design, engineering, construction, operations and maintenance technical services firm.”
The Company’s cash flow from operations was $179.5 million in the third quarter. Additionally, during the quarter, the Company repurchased 0.3 million shares of common stock at a total cost of $16.0 million and paid dividends of $18.0 million.
Kevin Berryman, Jacobs CFO, commented, “The growth in our backlog and continued margin strength across all lines of business positions us to deliver on our goal to improve growth momentum into FY18. Expectations of our underlying operating performance for the upcoming fourth quarter remain positive and in line with current expectations. As a result, our expected full year results are now expected to deliver adjusted earnings per share of $3.00-$3.15, including transaction costs associated with our recently announced acquisition of CH2M of approximately $0.07 per share.”