In first-quarter 2018 results announced on Feb. 7, Jacobs Engineering Group Inc., Dallas, reported revenue up about 8%, through organic growth and from its acquisition of CH2M, which closed Dec. 15. Wall Street construction sector analyst Jamie Cook, a managing director at Credit Suisse, said in a research note that “the top line surprise” was driven by the firm’s higher-margin technology and buildings segments, but Jacobs CEO Steve Demetriou also noted “modestly improved fundamentals” in its petroleum, chemicals and mining markets.
The Jacobs-only backlog in the quarter ending Dec. 29 was “relatively flat” at $19.6 billion versus record highs in prior quarters, Cook said, but it still rose by $1.4 billion compared with Q1 in 2017. The firm’s “balance sheet is in better shape” than expected, she added, with net debt of $1.5 billion compared with an expected $1.9 billion after the CH2M deal closing. Andrew Wittmann, industry sector analyst at Baird Equity Research, said CH2M met Jacobs’ internal operating cash flow targets for the year “and employee engagement seems to be holding.”