Jacobs Engineering 4Q16 Earnings Call Notes

Jacobs Engineering Group (JEC) Steve Demetriou on Q4 2016 Results

Expect challenging conditions to continue in FY 2017

“We expect challenging market conditions to continue into fiscal year 2017. Weak growth in developed markets, geopolitical issues and uncertain commodity prices will continue to impact some of our end-markets. Much like the beginning of last year, our oil and gas mining and certain industrial clients are continuing to avoid large capital expenditures to conserve cash. We do believe most of the declines in these end markets are now behind us, but it remains to be seen when industry growth will return in these sectors. More positively, we saw select growth opportunities in our buildings and infrastructure, aerospace and technology and life sciences markets in fiscal year 2016 and we expect further growth in these end markets in 2017. As we progressed through our fiscal year 2016, we saw a backlog stabilize and then increase by the fourth quarter. And we expect further increases to our backlog as we progress through fiscal year 2017.”

We were positive on transportation regardless of the election outcome, but pleased to see positive hype around Trump expectations

“So we were bullish on our capabilities to grow in transportation regardless of the election outcome. And so, we’re pleased to see a lot of positive hype around what’s going on with the Trump expectations, but we were positive moving forward in transportation.”

Of course we hope that all the stuff we read about happens

“As far as the post-election situation, again I feel like I’ve commented on that Jamie that with everything we were doing to position ourselves for growth, we attributed the momentum to that activity and less around the early stages of post-election. Are we optimistic? Yes. Do we hope all the stuff we read about happens? Of course. And we’ve seen what the Australian elections have done. And we hope that same thing happens in the U.S. And in fact Theresa May’s administration in the UK is reaffirming several of the important nuclear and other projects in that region that are important to us. And so we feel good about what’s going on globally around the political side of positioning our business.”