Jacobs Engineering 3Q profit falls 13 percent

PASADENA, Calif. (AP) — Jacobs Engineering Group Inc. said late Monday its fiscal third-quarter profit fell 13 percent as the engineering and construction company's government contracting business failed to offset declines in its private sector markets.

The Pasadena, Calif., company beat Wall Street estimates, though its shares fell in premarket trading Tuesday.

Net income fell to $94.9 million, or 76 cents per share, from $108.7 million, or 87 cents per share in the same quarter last year.

Analysts surveyed by Thomson Reuters expected earnings of 75 cents per share on revenue of $2.83 billion.

Revenue for the quarter ended June 30 fell 7 percent to $2.71 billion, from $2.92 billion in the same period last year.

The company shaved the top end of its previous per share earnings 2009 outlook, to a range of $3.10 to $3.35 from $3.10 to $3.50.

Craig L. Martin, president and CEO, said Jacobs Engineering Group's public sector markets that are led by national government programs remain good, but growth in the quarter was insufficient to offset declines in the company's private sector markets.

"Consequently, our results for the quarter were disappointing," he said in a statement. "The market remains uncertain with economic conditions, oil prices and business confidence reflecting that uncertainty."

The fortunes of engineering and construction companies, which build refineries, pipelines and other key accessories for energy projects, are tied directly to oil and natural gas prices. Investors see rising energy prices as a boon for engineering and construction projects, while falling oil and gas prices have the opposite result.

Jacobs Engineering Group said a backlog of $15.8 billion at the end of the quarter compares with a backlog of $16.6 billion the end of the last quarter. About $665 million was removed from backlog due to project cancellations and other reasons.

Analyst Alex Rygiel of FBR Capital Markets reiterated his "Outperform" rating and $49 price target Tuesday.

He said in a note to investors Jacobs Engineering Group management will likely be cautious in a scheduled conference call with investor analysts Tuesday, highlighting public sector work the company is developing and opportunities tied to federal stimulus money "as well as addressing the weaker private sector markets, including oil."

Shares fell $3.19, or 7 percent, to $40.20 in premarket trading.