Jacobs Solutions Inc. (NYSE: J) has recently released its financial outcomes for the fiscal second quarter ended March 29, 2024.
The company reported a 4.7% year-over-year increase in revenue, reaching $4.3 billion, with its People and Places Solutions (P&PS) segment seeing a notable 7.5% rise. Despite these gains, operating profit experienced a slight decline of 3% compared to the previous year, although adjusted operating profit showed a robust increase of 10%.
Jacobs also made significant shareholder returns through a $95 million share repurchase during the quarter and refined its fiscal 2024 adjusted EBITDA and adjusted EPS guidance.
CEO Bob Pragada expressed satisfaction with the quarter’s solid performance, particularly highlighting the exceptional results from the People & Places Solutions segment.
The company’s strategic focus on separating its CMS and Cyber & Intelligence business is progressing well, with ongoing efforts to streamline operations and optimize costs. Interim CFO Kevin Berryman also emphasized the team’s commitment to delivering high-value solutions and maintaining operational excellence, contributing to the company’s strong quarter. The reported free cash flow conversion for the year’s first half remained around 100%, aligning with Jacobs’ financial goals.
Jacobs Beats EPS Expectations in Q1, Revenue Miss
Comparing the current performance against expectations, Jacobs has narrowly missed the anticipated earnings per share (EPS) of $1.85, with an actual EPS of $1.29, but its adjusted EPS of $1.91 beat the forecasts.
However, it slightly missed the revenue expectation of $4.33 billion, reporting $4.27 billion for the quarter. The adjusted EPS from continuing operations stood at $1.91, indicating a resilient operational performance despite the challenges. The deviation in EPS can be attributed to a discrete tax benefit in the prior period, affecting year-over-year comparisons.
The company’s backlog increased by 1.5% year-over-year to $29.4 billion, with gross profit in backlog up by 3.7%, showcasing a healthy pipeline of future projects.
Jacobs Narrows Fiscal 2024 Adjusted EBITDA to a Range of $1.54 B to $1.58 B
Looking ahead, Jacobs has narrowed its fiscal 2024 adjusted EBITDA forecast to a range of $1,540 million to $1,585 million and adjusted EPS to $7.80 to $8.10, signaling a positive outlook for the remainder of the year.
These adjustments reflect a 9% and 10% increase year-over-year at the midpoints. The company is on track with its planned separation transaction, having received all necessary approvals and clearances, and anticipates closing the deal in the second half of the fiscal year. This strategic move is expected to streamline Jacobs’ operations further and enhance shareholder value.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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