NEW YORK (TheStreet) -- Shares of Jacobs Engineering Group Inc. (JEC) - Get Jacobs Engineering Group Inc. (J) Report are down -7.97% to $57.25 on Tuesday after the company reported a decrease in net earnings in its 2014 second quarter.
The company, which provides technical, professional, and construction services, reported net earnings of $83.5 million, or 63 cents per diluted share, on revenue of $3.2 billion, compared to the $104 million, or 80 cents per diluted share, on revenue of $2.8 billion for the second quarter of 2013.
TheStreet Ratings team rates JACOBS ENGINEERING GROUP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate JACOBS ENGINEERING GROUP INC (JEC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 0.3%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- JEC's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, JEC has a quick ratio of 1.71, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- JACOBS ENGINEERING GROUP INC's earnings per share declined by 6.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JACOBS ENGINEERING GROUP INC increased its bottom line by earning $3.23 versus $2.94 in the prior year. This year, the market expects an improvement in earnings ($3.65 versus $3.23).
- Net operating cash flow has increased to $326.48 million or 32.34% when compared to the same quarter last year. Despite an increase in cash flow of 32.34%, JACOBS ENGINEERING GROUP INC is still growing at a significantly lower rate than the industry average of 134.18%.
- You can view the full analysis from the report here: JEC Ratings Report