Yahoo Finance Jacobs (J) Selected as PMCM Partner by thyssenkrupp Steel
Jacobs Solutions Inc. J is selected as a Program and Construction Management (“PMCM”) partner by thyssenkrupp Steel for its $2.5 billion worth decarbonization project.
Jacobs, as a PMCM partner, will deliver services that include the overall coordination and management of engineering services, assembly management of the Engineering Procurement Construction contractor for the direct reduction plant, construction management and supporting contract management and other related services.
This project, for the steel mill in Duisburg, Germany, will incorporate a new process, that uses green hydrogen for iron reduction, and will replace traditional coal-powered blast furnaces with hydrogen-powered electric smelters. Per the project, the decarbonized steel plant is scheduled to start its operation by 2026 end. This plant is expected to produce 2.5 million metric tons of direct reduced iron and reduce carbon emissions by up to 3.5 million metric tons per year.
Following this contract win announcement, shares of Jacobs gained 1.2% during trading hours on Nov 20.
Solid Backlog Driving Growth Prospects
Jacobs has been experiencing increased demand for consulting services in various sectors, including infrastructure, water, environment, space, broadband, cybersecurity and life sciences. The company's strong performance in recent quarters can be attributed to efficient project execution and the ongoing contract wins bear testimony to the fact.
Efficient project execution has been a key factor driving Jacobs’ performance over the last few quarters. This is reflected in the solid backlog level, which was $28.9 billion at the end of the third quarter of fiscal 2023, representing a 2.9% increase from the prior year.
Although foreign exchange risks, high costs and expenses are major concerns, Jacobs expects to benefit from the strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply-chain investments in the upcoming period. This will help the company to maintain positive momentum in the near term.
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Shares of this provider of professional, technical and construction services have increased 17% in the past six months compared with the Zacks Technology Services industry’s 22.4% growth. Even though the shares of the company underperformed its industry, its consistent contract wins are likely to boost its growth prospects.
Zacks Rank & Key Picks
Jacobs currently carries a Zacks Rank #4 (Sell).
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