Will Jacobs (JEC) Surprise This Earnings Season? - Analyst Blog

Engineering and construction company, Jacobs Engineering Group Inc. JEC is set to report fiscal second-quarter 2014 results on Apr 28, after the market closes. Last quarter, the company delivered 2.74% negative earnings surprise. Let's see how things are shaping up for this announcement.

Factors to Consider This Quarter

In the first quarter of fiscal 2014, Jacobs reported weak results, with earnings per share of 71 cents, 6.6% lower than the year-ago quarter. The decline in earnings was primarily due to losses associated with the Sinclair Knight Merz acquisition. However, total revenue in the quarter increased 11.2% year over year to $3.1 billion.

Management predicts ample opportunities to increase market share as end markets promise significant improvement. Over the past few quarters, Jacobs has grown through contract wins. Likewise, in fiscal second quarter, the company has won contracts in various regions across the globe. Moreover, the satisfaction rate Jacobs provides to its customers is reflected in the repeat business the company generates.

Earnings Whispers?

Our proven model does not conclusively show that Jacobs is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as we see below.

Zacks ESP: This is because the Most Accurate estimate stands at 89 cents flat with the Zacks Consensus Estimate. Hence, the difference is 0.00%.

Zacks Rank: Jacobs has a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Other Stocks to Consider

Here are other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Beazer Homes USA Inc. BZH, Earnings ESP of +8.70% and a Zacks Rank #3.

Chicago Bridge & Iron Company N.V. CBI, Earnings ESP of +5.36% and a Zacks Rank #3.

Great Lakes Dredge & Dock Corp. GLDD, Earnings ESP of +66.67% and a Zacks Rank #3.