Jacobs Engineering Group (J, Financial), a professional services firm, turned in strong performance for the fiscal year. It grew revenues 11% organically and grew diluted earnings per share roughly 15%. When CEO Steve Demetriou joined in 2015, he laid out a back-to-basics strategy of eschewing commoditized, risky projects in favor of high-margin, predictable business. Management has been hard at work realizing this vision and the company whizzed past several milestones in 2019. It divested its Energy, Chemicals & Resources division at an attractive price, freeing the company of its least profitable and most cyclical segment. Management used the proceeds to expand Jacobs’ portfolio in the attractive government services space with the acquisitions of KeyW and Wood Group’s Nuclear business. Further, nearly two years after the transformative acquisition of CH2M, it is safe to say the integration has been a success. The company celebrated in November with a rebranding from “Jacobs Engineering” to “Jacobs Solutions,” a well-deserved recognition that Jacobs is now a low risk, capital-light solutions provider serving attractive end-markets.
From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund mangement performance discussion for 2019.
