Jacobs Engineering shares slide as backlog shrinks

AP News
Posted: Nov 17, 2009 2:25 PM

Jacobs Engineering Inc. shares were one of the biggest percentage decliners on the New York Stock Exchange Tuesday after the company said its backlog was shrinking and issued profit guidance for fiscal 2010 that was short of analysts' expectations.

The Pasadena, Calif., company, which provides technical, professional and construction services to industrial, commercial and governmental clients, said on Monday its fourth-quarter profit fell 31 percent and sales dropped 20 percent.

The profit guidance of between $2 and $2.60 per share for fiscal 2010 fell short of Wall Street projections of $2.83 per share.

In 2009, the company earned $3.21 per share.

Project cancellations valued at $320 million helped shrink the company's backlog of contracts by 4 percent over the quarter to $15.2 billion, said Baird analyst Andrea E. Wirth in a note to investors.

Operating margin also fell.

Jefferies & Co. analyst Michael Dudas said the balance sheet is strong, however, while the remaining backlog is "sizeable" and there are opportunities in the public sector.

The private sector accounts for 64 percent of the company's sales, and BMO Capital Markets analysts in a client note. They expect "continued earnings dislocation" until government clients increase enough to offset corporations' tight budgets.

Jacobs shares tumbled $6.66, or 14.6 percent, to $38.83 in afternoon trading.