UPDATE 2-Jacobs shares fall on weak backlog, lowered '09 view
(Adds analysts' comments, updates share movement)
BANGALORE, July 28 (Reuters) - Shares of Jacobs Engineering Group Inc (JEC.N: Quotazione) fell 9 percent Tuesday, a day after the construction services company reported lower quarterly profit and backlog, and trimmed the top end of its 2009 earnings forecast range.
Jacobs reported third-quarter backlog of $15.8 billion, down 5 percent sequentially, and removed about $665 million from backlog due to project cancellations and shifting cost risks to customers.
Barclays Capital analyst Andy Kaplowitz said backlog might have troughed in the third quarter, and it could stabilize in the next couple of quarters and rise again toward the end of calendar year 2009 and early 2010.
A company executive said on a conference call that about $300 million of backlog in the third quarter was hit by a project cancellation in the upstream market and there might be more cancellations going forward in that segment.
"I am not going to rule out a cancellation (in the fourth quarter) but I expect the overall oil and gas markets to be slightly firmer, meaning slightly lower chance of cancellations," said analyst Kaplowitz, who has an "equal weight" rating on the stock.
The Pasadena, California-based company, which caters to industrial, commercial, and government clients, said although the oil sands business appears to have "reenergized," it would like its exposure to that market to be smaller.
About 55 percent of the company's revenue comes from the oil market. Continua...