Jacobs Engineering Group Earnings Call Nuggets: Flat Backlog and Timeline for Top Line Growth

Jacobs Engineering Group (NYSE:JEC) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

Flat Backlog

Andy Kaplowitz – Barclays: Craig, so if you look at the backlog in process, sequentially it flattened here. It’s up nicely year-over-year. I know you are going to me it’s lumpy. But to try and characterize that particular part of the business better, how do the leading indicators in that business look, things like billable hours, overtime, utilization, salary multiplier? As you put all these things together, are they still flashing green for you and how did they do throughout the quarter given some uncertainty on the political front?

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Craig L. Martin – President and CEO: I guess, yes, it’s lumpy. So, that first part of your question was – the answer is yes. But the second part of your question, the answer is yes also. Billable hours are growing nicely. We are seeing high utilization. We are starting to work a lot of overtime. So, everything about the business, salary pressures are starting back in. There’s starting to be some opportunity to move up margins. So, everything – only indicators in the process industry are where they were a quarter ago or two quarters ago, and we have every confidence that we’re going to continue to see good solid growth out of that. I think the flat backlog quarter-over-quarter is a timing issue more than anything else.

Andy Kaplowitz – Barclays: That’s what I thought you’d say. I remember I think it was at your Investor Day you talked about maybe having – cost structure would be higher in the first quarter and it really wasn’t. And you talked about maybe some interruption in that public business from the election, and obviously doesn’t look like we saw anything. So, maybe if you could comment on that? And I know that – I don’t want to steal Jamie’s thunder about guidance, but like all I would ask there is, seems like this quarter may have been marginally better than you thought, yet you keep guidance?

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