Jacobs Solutions, Inc. (J Quick QuoteJ - Free Report) is all set to act as a progressive design-build contractor for the Donald C. Tillman Advanced Water Equalization Basins project in the City of Los Angeles, CA.

J will support LA Sanitation and Environment and the Los Angeles Department of Water and Power on the Groundwater Replenishment Project to increase recycled water production by 2035. Per the contract, Jacobs will undertake design, permitting, construction, start-up and commissioning-related responsibilities together with its lead contracting partner Kiewit.

The Donald C. Tillman Advanced Water Purification Facility (AWPF) depends on a constant, stable flow of primary effluent to produce purified water suitable for reuse through groundwater replenishment. These equalization basins can hold up to nine and a half million gallons of water and will regulate variable flows to the AWPF for the optimal function of its advanced water treatment processes. This move is integral to the Los Angeles Groundwater Replenishment (GWR) Project. The AWPF was also delivered by Jacobs.

Currently, Jacobs is supporting a $740 million design-build contract at the Donald C. Tillman site, which is part of the GWR project.

Jacobs’ Efforts for Some Critical Infrastructure Projects

J has been winning some critical infrastructure projects of late. In October, it won two such contracts. Firstly, it received a new five-year contract to provide digital and data-driven solutions to Lincoln-Sewer Management District 1 Wastewater Authority. Again, it secured a 10-year contract with Soquel Creek Water District to operate and maintain an advanced water purification facility.

Apart from these two infrastructure projects, J has been part of some of California’s critical infrastructure projects, such as the Pure Water Project for Las Virgenes-Triunfo, the Alliance for Renewable Clean Hydrogen Energy Systems to establish a statewide hydrogen hub, Los Angeles World Airports Capital Improvement Program, the award-winning Los Angeles Federal Courthouse, the Delta Conveyance Project, the Sixth Street Viaduct Replacement Project and the Port of San Francisco Waterfront Resilience Program.

Jacobs’ Solid Project Execution Bodes Well

Jacobs' ability to execute projects efficiently has played a pivotal role in driving the company's performance in recent quarters. The continuous success in securing new contracts stands as evidence of this proficiency.

The solid project execution efforts are supported by its ongoing backlog growth. At the fiscal third-quarter end, the company reported a backlog of $30.6 billion, up from $28.9 billion a year ago. Book-to-bill was 1.29x at the third quarter of fiscal 2024-end. This reflects persistent solid demand for Jacobs' consulting services.

People & Places Solutions’ backlog was $19.28 billion, up from $17.5 billion reported in the year-ago period. The backlog at the Critical Mission Solutions segment was $8.45 billion, up from $8.1 billion a year ago.

J’s Stock Performance

Shares of this Zacks Rank #4 (Sell) company have gained 7.3% in the past year compared with the Zacks Technology Services industry’s 69.8% growth. The company’s prospects are marred by increased costs and higher restructuring & other charges.

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Jacobs revealed that in the first nine months of fiscal 2024, the direct cost of contracts increased 5.1% year over year due to the ongoing inflationary pressures of labor, materials and other related expenses. Also, an increase in other department spends and personnel costs, and unfavorable foreign currency translation are added headwinds.

That said, Jacobs and other companies like AECOM (ACM Quick QuoteACM - Free Report) , Quanta Services, Inc. (PWR Quick QuotePWR - Free Report) , KBR, Inc. (KBR Quick QuoteKBR - Free Report) are expected to benefit from strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply chain investments.

A Brief Discussion of the Above-Mentioned Stocks

AECOM: ACM is capitalizing on strong infrastructure demand both domestically and internationally. It saw robust organic growth in net service revenue across all reportable segments during the third quarter of fiscal 2024. Additionally, management's emphasis on optimizing its operating model and driving digital innovation bodes well for future growth.

ACM is expected to release its fourth-quarter fiscal 2024 on Nov. 18, after the market close. Its fiscal fourth-quarter earnings are expected to grow 20.8% year over year.

Quanta: The company has benefited from sustained demand for infrastructure services, particularly in renewable energy and power grid development. By capitalizing on key megatrends, it has positioned itself as a leader in advancing the transition to sustainable energy solutions and driving technological innovations.

Recently, it reported mixed results for the third quarter of 2024, wherein adjusted earnings beat the Zacks Consensus Estimate, but revenues missed the same.

KBR: The company is capitalizing on growth in high-end defense engineering, classified intelligence, and international programs within its GS business, along with increased contributions from technology sales, engineering, and professional services in the STS business. KBR's efforts to drive both organic and inorganic growth across its segments are yielding positive results. Its focus on value-enhancing acquisitions, strategic partnerships, and delivering shareholder value is promising.

Recently, it reported mixed third-quarter fiscal 2024 results, with adjusted earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.