Jacobs Adds New Contracts - Analyst Blog

In keeping with its contract winning streak, engineering and construction company, Jacobs Engineering Group Inc. JEC, recently added two more contracts. Jacobs has been gaining high value and important contracts in the recent past, based on the strong customer relationship model it preaches. The company also boasts a significant repeat business from existing customers, which reinforces our belief in a bright future.

Recently, Jacobs won a contract from P.T. OKI Pulp and Paper Mills regarding the design and supply of integrated chlorine dioxide plant, for the company's pulp mill project in South Sumatra, Indonesia. The plant value remained undisclosed; however, it is expected to be operational by 2016. Once completed, the plant is expected to produce 172 metric tonnes of chlorine dioxide per day — the highest to be produced by any mill.

Per the contact, Jacobs is expected to supply key equipment and materials, designing and engineering the plant, providing technical services for plant erection, operator training, commissioning and testing. Management is optimistic of executing the contract successfully given the company's experience in building chlorine dioxide plants in Indonesia since 1980.

Jacobs won another contract the same day, a five-year agreement for three facilities from Borealis in Belgium. The contract value has been kept under wraps. However, each project is estimated to have an installed cost of up to $13 million.

As per the contract, Jacobs will be providing its services to Borealis Polymers N.V., Borealis Kallo N.V. and Borealis Antwerpen Compounding N.V. The services to be offered include construction management, study, engineering, procurement along with personnel support services.

With a market capitalization of $7.0 billion, Jacobs has a Zacks Rank #4 (Sell). Some better-ranked stocks worth considering in the industry include Pernix Group Inc. (PRXG), Willdan Group, Inc. WLDN and Gafisa S.A. GFA. While Pernix Group and Willdan Group sport a Zacks Rank #1 (Strong Buy), Gafisa carries a Zacks Rank #2 (Buy).