Jacobs, back in the saddle, wins big.

Jacobs, back in the saddle, wins big

This "very definitely" could be the year Jacobs Engineering Group Inc. breaks into the billion-dollar revenue club, according to Joseph John Jacobs, 73, chairman and chief executive officer of the company he founded in 1947.

For the fiscal first quarter ended Dec. 31, revenues of the Pasadena-based company grew 28 percent to $211.54 million. Annual revenues hit a record $793.58 million last fiscal year ended Sept. 30 -- nearly 350 percent more than the $177.84 million of fiscal 1984, five years earlier.

That was the year Jacobs decided to regain day-to-day operating control of the company when it reported a record net loss $8.9 million even after a net gain of $2.7 million from a terminated pension plan that year. Jacobs had removed himself from the business to concentrate on strategic planning before concluding he was needed back on the firing line. For one thing, he knew how to cut overhead.

Jacobs cut out one whole layer of management and 14 vice presidents, along the way to cutting overhead by a third and restoring profitability.

Last fiscal year, he said, the company increased net earnings 56 percent over the prior year to $10.22 million, which represented a return on average equity exceeding 20 percent, and net per share leaped 41 percent to $1.90 from $1.35. For the fiscal first quarter ended Dec. 31, Jacobs netted a record $3.3 million or 60 cents a share, the seventh consecutive quarter of earnings growth.

Even after excluding capital gain of $518,000 or 9 cents a share from the sale of marketable equity securities during the quarter, earnings jumped 35 percent and earnings per share by 28 percent from the like quarter of the prior year.

While increasing earnings and revenues, the company expanded its backlog to a record $989.5 million at Dec. 31 -- $19.5 million more than three months earlier and $149.3 million more than 12 months earlier.

Moreover, the company paid off the $9 million remaining long-term debt to clear the decks for Jacobs either to initiate a cash dividend or pursue acquisitions.

Jacobs allowed he frankly prefers acquisitions to dividends if the company can find a match that will enable the company to continue earning 20 percent on equity. "We have a wide net out and are engaging in some preliminary discussions," he said, citing such areas as toxic waste remediation, overseas business, new technology.

Meanwhile, analysts were projecting Jacobs earnings of $2.20 to $2.40 a share this year. And investors last week were buying the common for $32.625 a share on the New York Stock Exchange, where trading was moved in December from the American Stock Exchange, within a hair of the stock's record high of $32.75.