QUOTE AND NEWS
Market Intelligence Center  Jul 22  Comment 
Jacobs Engineering Group Inc. (JEC) traded between $40.22 and $40.98 before closing at $40.78 Tuesday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s patented algorithms selected a Oct. '15 $40.00 covered...
Benzinga  Jul 21  Comment 
Jacobs Engineering Group Inc. (NYSE: JEC) announced today that it was awarded a contract to provide design services for the Construction Package 2-3 (CP 2-3) of the California High Speed Rail, which represents the continuation...
newratings.com  Jul 1  Comment 
WASHINGTON (dpa-AFX) - Jacobs Engineering Group Inc. (JEC) announced the appointment of Steven Demetriou as its President and Chief Executive Officer or CEO. Demetriou will also be elected to the Board. Demetriou will start in his new role with...
Market Intelligence Center  Jun 30  Comment 
Jacobs Engineering Group Inc. (JEC) traded between $40.51 and $42.19 before closing at $40.65 Monday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s patented algorithms selected a Aug. '15 $40.00 covered...
newratings.com  Jun 23  Comment 
WASHINGTON (dpa-AFX) - Jacobs Engineering Group Inc. (JEC) announced it was reappointed as Project Representative for the $22 billion or 14.8 billion pounds Crossrail program by the UK's Department for Transport or DfT and Transport...
Market Intelligence Center  Jun 16  Comment 
MarketIntelligenceCenter.com's option-trade picking algorithms have identified an attractive covered-call trade on Jacobs Engineering Group Inc. (JEC). Look at the Oct. '15 $40.00 covered call for a net debit in the $38.60 area. This trade has a...
Market Intelligence Center  Jun 10  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with Jacobs Engineering Group Inc. (JEC) that should provide a 5.49% return in just 128 days. Sell one Oct. '15 call at the $42.50 level for each...
Market Intelligence Center  May 21  Comment 
The patented algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center found a trading opportunity with Jacobs Engineering Group Inc. (JEC) that should provide a 3.99% return in just 148 days. Sell one Oct. '15 call at...




 

Jacobs Engineering Group (NYSE: JEC) designs and builds refineries, pharmaceutical manufacturing and chemical plants and other types of technically sophisticated facilities for its clients. For instance, the company is responsible for designing all aspects (power/steam generation, underground infrastructure, and tank farm) of a bitumen-collection facility in the oil sands of Fort Hill, Canada. In addition to facility design, the company provides both engineering and consulting services. In its role as NASA's primary services support contractor, the company helps design, test, and analyze space-and aircraft components.

Rising demand for oil has benefited the company in over the last few years. Although the company serves a number of different industries, its biggest source of revenue are refiners and oil exploration and production companies, which the company helps with expanding existing refineries and extracting more oil from existing wells. As oil prices rises, demand for JEC's services also increases.

Business Overview

Business & Financial Metrics[1]

In 2009, JEC generated a net income of $399.9 million on revenues of $11.47 billion. This represents a 5.0% decrease in net income and a 1.9% increase in total revenue from 2008, when the company earned $420.7 million on $11.25 billion in revenue.

Business Segments[2]

Jacobs has only one reportable segment but breaks down its revenue in terms of geographic region. Well over half of the company's revenues come from customers in the United States.

IMAGE:JEC-Geo2009.jpg[2]

Trends and Forces

US Government Spending Impacts JEC less than competitors

Contracts with the United States government--principally through the Department of Defense (DOD), the Department of Energy (DOE), and the Department of Transportation (DOT)--accounted for 20.3% of Jacobs' total revenues in 2009.[3] While this exposure is less than some of Jacobs' competitors it still represents a significant portion of the company's total yearly services and puts the company at risk of volatility in government spending. The US budget varies heavily from year to year depending on tax revenues, the party in power, military realities, and public's perception of the social worth of any given project. This volatility has the potential to impact Jacob's future revenues, either through adjustments in the number of new contracts awarded or the extent to which old contracts are completely funded and expanded upon.

The Continued Profitability of Name-Brand Prescription Drugs Essential for Jacobs' Pharmaceutical Projects

While Jacobs' relatively small client base can be beneficial, it can also prove troublesome in shifting markets. This would quickly become apparent in the company's projects for the Pharmaceutical industry if new name-brand prescription drugs lost their traditional profitability. Through the 2000's the price of prescription drugs rose steadily, prompting many politicians to consider measures limiting prices or shortening the length of patent protection on these drugs. Any measure of this type would inevitably reduce the profitability of new drugs coming to market, and this would have a dampening effect on development and production efforts on the part of the name-brand drug manufacturers. In 2009, Jacobs received nearly 10% of total revenues from projects for the pharmaceutical and biotechnology industries for services ranging from construction of new labs and plants to maintenance of production facilities.[4] Any spending cuts on these types of projects would have a significant negative impact on Jacobs' earnings. While government price-capping actions would have a positive effect on the generic drug market, Jacobs' ties to the major manufacturers would prevent it from quickly capitalizing on this growth.


Competition

Competitors by Primary Service Market

Jacobs breaks its competitive markets down into four categories: a broad market: Engineering, Construction, and Maintenance (ECM); and then more specific Buildings; Infrastructure; and U.S. Federal Programs.

References

  1. JEC 2009 10-K pg. F-4  
  2. 2.0 2.1 JEC 2009 10-K pg. F-29  
  3. JEC 2009 10-K pg. 21  
  4. JEC 2009 10-K pg. 37  
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