Jacobs Q3 Earnings Meet Estimates, Revenues Up Y/Y, Stock Down

Besides, the company is benefiting from rising investment tied to Artificial Intelligence infrastructure. Businesses directly related to the AI build-out represented 11% of adjusted net revenues during the quarter, including data centers, semiconductors, energy and power, water and digital services. 

J stock tumbled 2.4% during yesterday’s after-hours trading session, despite management’s approach of raising fiscal 2026 expectations.

Inside Jacobs’ Q3 Results

Jacobs reported adjusted earnings of $1.84 per share for the third quarter of fiscal 2026, in line with the Zacks Consensus Estimate, but up 13.6% from $1.62 in the year-ago quarter.

Gross revenues of $4.08 billion surpassed the consensus mark of $3.54 billion by 15.1% and rose 34.5% year over year. Adjusted net revenues, which exclude low-margin pass-through revenues, increased 8.3% year over year to $2.42 billion. Backlog climbed 27.3% to a record $28.89 billion.

Adjusted operating profit increased 10.8% to $341.8 million year over year, while the corresponding margin improved 30 basis points (bps) to 14.1%. Adjusted EBITDA advanced 16.7% to $366.8 million, and the margin expanded 110 bps to 15.2%.

Jacobs' I&AF Segment Posts Solid Expansion

I&AF segment’s revenues surged 38.8% year over year to $3.75 billion. Adjusted net revenues advanced 9.9% to $2.09 billion, reflecting entirely organic growth. Segment operating profit rose 13.6% to $268.1 million. The operating margin expanded 40 bps to 12.8%, indicating that stronger volumes and execution translated into improved profitability despite an evolving revenue mix.

Life Sciences & Advanced Manufacturing delivered the strongest top-line growth. Gross revenues jumped 116.6% to $1.63 billion, while adjusted net revenues rose 24.2% to $476 million, led by data center and semiconductor activity.

Critical Infrastructure gross revenues increased 7.2% to $1.23 billion, with adjusted net revenues up 9.4% to $1.01 billion. Water & Environmental gross revenues grew 10.8% to $889 million, although adjusted net revenue growth was limited to 1.5% as environmental activity offset solid water demand.

Jacobs' PA Consulting Margin Improves

PA Consulting generated revenues of $329.5 million, down about 1% from the year-ago quarter. However, operating profit increased 1.7% to $73.6 million and the operating margin expanded 50 bps to 22.3% year over year.

PA Consulting backlog reached $459 million, up 9.3% year over year, supporting management’s confidence in the segment’s opportunity pipeline following the acquisition of the remaining ownership stake.

J's Cash Flow Strengthens

Jacobs generated $456.1 million in reported operating cash flow and spent $25.1 million on capital expenditures. Adjusted free cash flow, excluding accelerated employee-related payments connected with the PA Consulting transaction, totaled $541 million. 

The company ended the quarter with $1.17 billion in cash and cash equivalents and $3.58 billion in long-term debt. Net leverage declined to 1.8 times adjusted EBITDA, falling below the fiscal year-end target ahead of schedule.

Jacobs repurchased $142 million of shares during the quarter, bringing fiscal year-to-date buybacks to $614 million. It also declared a quarterly dividend of 36 cents per share, representing a 12.5% year-over-year increase.

Jacobs Raises Fiscal 2026 Expectations

Management raised the midpoint of its fiscal 2026 adjusted earnings outlook for the third consecutive quarter. Adjusted earnings are now expected between $7.20 and $7.30 per share, compared with the previous range of $7.10-$7.35.

Adjusted net revenue growth is projected at 9.5-10%, up from the prior 8-10.5% range. The adjusted EBITDA margin is expected between 14.7% and 14.8% (compared with 14.6-14.9% expected earlier), while the adjusted free cash flow margin is forecast at approximately 8%.

The outlook reflects strong execution, record backlog and continued private-sector and utility capital spending. Jacobs also expects an extra week in the fourth quarter to benefit adjusted net revenue growth.

J Stock’s Zacks Rank & Recent Construction Releases

Jacobs currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Martin Marietta Materials, Inc. MLM reported outstanding second-quarter 2026 results, wherein adjusted earnings (from continuing operations) and revenues topped the Zacks Consensus Estimate and increased year over year.

Martin Marietta’s results benefited from strong organic performance and contributions from acquisitions. Aggregates shipments increased 17% to a record 61.6 million tons, supported by infrastructure and heavy nonresidential demand. Heavy nonresidential demand also benefits from data center, power-generation and warehouse construction. Martin Marietta raised its 2026 revenue guidance to a range of $7.2-$7.4 billion, with a midpoint of $7.3 billion.

CRH plc CRH reported exceptional second-quarter 2026 financial results with adjusted earnings and total revenues topping the Zacks Consensus Estimate and growing year over year. Positive pricing, favorable demand and acquisition contributions supported the quarterly growth. CRH completed 11 acquisitions during the quarter for $1.1 billion.

CRH reaffirmed 2026 net income guidance of $3.9-$4.1 billion, adjusted EBITDA guidance of $8.1-$8.5 billion and earnings guidance of $5.60-$6.05 per share. The company expects public infrastructure spending and reindustrialization activity to support demand, while new-build residential conditions remain subdued.

Quanta Services, Inc. PWR reported better-than-expected second-quarter 2026 results, with adjusted earnings and revenues beating the Zacks Consensus Estimate. Quanta’s performance benefited from strong demand for grid, generation and data-center infrastructure, broader self-perform capabilities, efficient resource utilization and solid execution across both segments.

Quanta increased its 2026 revenue forecast to $39.3-$39.7 billion, representing a $4.55 billion increase at the midpoint from its prior outlook. Adjusted earnings are now projected to be in the range of $16.45-$16.95 per share, while adjusted EBITDA is expected to be between $4.09 billion and $4.21 billion. Free cash flow is forecast to be in the $2-$2.5 billion range.

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