Shares of engineering and construction firm Jacobs Engineering Group (JEC) were trading at $60.76 Wednesday afternoon, about 5.5% higher since Tuesday morning as the company rides a wave of expectations for future investment in infrastructure by President-Elect Donald Trump.
Jacobs released its fourth-quarter earnings before the market opened yesterday and investors showed confidence that the Dallas company's restructuring and cost-cutting efforts will pay off. Jacobs reported earnings per share of 77 cents on about $2.64 billion in revenue. Analysts surveyed by FactSet expected to see earnings of 65 cents on roughly $2.76 billion.
The company's restructuring has been taking place for the better part of a year as it consolidates its business into four segments: petroleum and chemicals, buildings and infrastructure, aerospace and technology and industrial.
"Beyond the traditional cost-cutting measures, there's clearly a culture change as well," Morningstar analyst David Silver said in a phone interview. He estimated that about 5000 people have left Jacobs since it began the restructuring process. The company also closed a deal in October to relocate its headquarters to Dallas from Pasadena, Calif., where it was founded.
Jacobs suffered a 15.2% year-over-year drop in fourth quarter revenues, but that hasn't prevented it from being swept up in the broader rally among infrastructure stocks that has taken place since Trump's upset victory.
Jacobs could stand to gain if Trump delivers on his $1 trillion infrastructure investment campaign promise, but no one knows for sure how (or if) the plan will work.