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Jacobs (JEC) to Report Q3 Earnings: What’s in the Cards?

Zacks

Jacobs Engineering Group Inc. JEC is slated to release third-quarter 2017 results before the market opens on Aug 08. In the last reported quarter, the company reported earnings of 78 cents per share, which came above the Zacks Consensus Estimate of 71 cents. In the trailing four quarters, Jacobs delivered an average positive earnings surprise of 5.8%, beating estimates thrice while matching once. Let’s see how things are shaping up for this announcement.

Factors at Play

Jacobs believes that efficient operational execution and strategic value-added mix in business, along with rising demand for building and infrastructure services, would drive its bottom line in the upcoming release.

In the last few months, Jacobs secured several contracts from renowned institutions and public-sector agencies like the U.S. Army, EQUATE Petrochemical Company, Exxon Mobil Corporation, TransCanada Corporation, Sellafield Ltd, NASA, Saudi Aramco BASF, Suncor Energy, Sipchem Lubrizol, Kraton Corporation and Codelco. Such lucrative deals are expected to escalate the company's revenues in the impending quarter.


However, dismal pricing conditions within the oil and gas market have been hurting Jacobs' Petroleum & Chemicals segment. The conclusion of several field services projects is weighing over its Industrial businesses. Persistence of these issues could weaken the company's top-line performance.

Although Jacobs believes that it is in a position to win medium and large-sized chemical derivative prospects throughout the world, a stronger U.S. currency might hurt foreign revenues and earnings in the quarter. This is because a strengthening dollar raises the prices of the company's construction services and subsequently, renders them less competent in markets with relatively lower exchange rates.

Earnings Whispers

Our proven model does not conclusively show that Jacobs will beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. That is not the case here as we will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: Jacobs currently has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and Zacks Consensus Estimate are both pegged at 79 cents.

Zacks Rank: Jacobs carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

In the last three months, Jacobs’ shares have lost 3.64%, wider than the industry’s loss of 3.12%.

Some companies from the sector with the right combination of elements to beat estimates are listed below:

Jeld-Wen Holding Inc. JELD, with an Earnings ESP of +7.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Thor Industries, Inc. THO, with an Earnings ESP of +3.08% and a Zacks Rank #1.

Trex Company, Inc. TREX, with an Earnings ESP of +1.85% and a Zacks Rank #2.

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