Jacobs' Halcrow Signs Consultancy Deal With CEDD in Hong Kong
The joint venture (JV) between Jacobs Solutions Inc.’s J subsidiary, Halcrow, and AECOM ACM has entered into a consultancy agreement with the Civil Engineering and Development Department (“CEDD”) of the Hong Kong Special Administrative Region (“HKSAR”) government. The agreement underlines the associated work for the first phase of the San Tin Technopole in Hong Kong.
The contract for the first phase includes 250-hectare land development for the city within the Northern Metropolis to support innovation and technology development, housing, community and commercial facilities. Moreover, the project will adopt an integrated low-carbon infrastructure system to meet carbon neutrality goals before 2050 and employ digital strategies, including building information modeling and digital twins, to improve project outcomes.
The work scope of the JV includes design review, detailed design, tendering, construction supervision and associated engineering infrastructure works of San Tin Technopole.
San Tin Technopole development will be carried out in two phases, with the first population and business intake expected in 2031. Upon completion, it is expected to offer approximately 54,000 new housing units.
Increasing Backlog Driving J’s Growth
Jacobs’ efficient project execution has increased the demand for its consulting services in various sectors, including infrastructure, water, environment, space, broadband, cybersecurity and life sciences. The strong performance in the recent quarters is reflected through its ongoing contract.
The aforementioned statement is supported by the company’s ongoing backlog growth. At the fiscal third-quarter end, it reported a backlog of $30.6 billion, up from $28.9 billion in the year-ago period. This reflects persistent solid demand for Jacobs' consulting services. Of this backlog, P&PS backlog was $19.28 billion compared with $17.5 billion in the comparable year-ago period, primarily driven by growth in the Life Sciences and Energy markets.
Furthermore, the Critical Mission Solutions’ backlog at the end of the fiscal third quarter was $8.45 billion, up year over year from $8.1 billion, providing strong visibility into the base business. The upside was mainly fueled by expansion and higher funding in the U.K. and U.S. nuclear remediation markets, along with growth in the U.K. defense sector.
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Shares of this professional, technical and construction services provider have gained 9.1% in the past three months, outperforming the Zacks Technology Services industry’s 4.6% growth. The company is expected to benefit from strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply-chain investments.
Zacks Rank
Jacobs currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
About AECOM
AECOM is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities and government, as well as those in environmental, energy and water businesses. It specializes in providing integrated services for planning, construction and maintenance of infrastructures that include consulting, architecture and engineering, as well as managing the requirements for energy, water and environment of various private and public clients.
ACM recently posted decent third-quarter fiscal 2024 results, with earnings surpassing the Zacks Consensus Estimate. On a year-over-year basis, the top and bottom line increased, backed by solid organic growth in net service revenues in its reportable segments.
Recent Peer Releases
KBR, Inc. KBR reported mixed second-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
The upside was predominantly driven by expansion in Sustainable Technology Solutions and notable advancements within Government Solutions. The International, Defense & Intel and Science and Space sectors witnessed new contracts and on-contract growth. Driven by robust performance in its core business, KBR raised its adjusted EBITDA and cash flow guidance for 2024.
Quanta Services Inc. PWR reported mixed results for second-quarter 2024, wherein adjusted earnings missed the Zacks Consensus Estimate, but revenues surpassed the same. Both metrics increased on a year-over-year basis.
The growth was supported by robust demand for its services, propelled by customers' multi-year initiatives aimed at modernizing and fortifying utility infrastructure, expanding renewable energy generation and transmission infrastructure, and transitioning toward a low-carbon economy. Moreover, the company has raised its 2024 guidance for major metrics, owing to the expected contributions from its recent acquisition of CEI.
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