Why Contractor Jacobs Solutions' Shares Are Down Today

Jacobs Solutions Inc J shares are trading lower by around 4% after it reported Q4 FY23 results.

Revenue grew 10.5% Y/Y to $4.29 billion, beating the consensus of $4.16 billion.

Revenues by segments: Critical Mission Solutions $1.24 billion (vs. $1.16 billion a year ago), People & Places Solutions $2.51 billion (vs. $2.23 billion the prior year), Divergent Solutions $251.9 million (vs. $242.2 million a year ago) and PA Consulting $288.2 million (vs. $254.4 million prior year).

At the end of the quarter, the company's backlog increased by 4% Y/Y to $29.1 billion.

Adjusted EPS from continuing operations of $1.90, beating the consensus of $1.89.

Operating cash flow stood at $219.4 million versus $277.5 million a year ago.

As of September 29, 2023, the company held cash and cash equivalents of $929.5 million.

FY24 Outlook: Jacobs Solutions expects adjusted EBITDA of $1.53 billion-$1.60 billion and adjusted EPS of $7.70-$8.20 vs. consensus of $8.40.

"Looking into fiscal 2024 and beyond, we are aligned to multiple large, growing and well-funded priorities including global infrastructure modernization, climate response and investments in critical supply chains. Further, we are committed to delivering on a bold cost optimization plan and targeting at least 300 basis points of margin improvement in fiscal year 2025," said Claudia Jaramillo, CFO.

Yesterday, Jacobs Solutions disclosed a definitive deal to spin off and combine its Critical Mission Solutions (CMS) and Cyber & Intelligence government services businesses with Amentum.

Price Action: J shares are down 6.75% at $127.74 on the last check Tuesday.

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