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KBR Inc. Contract Spree Continues, Wins FEED for Oman LNG

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KBR Inc. (KBR - Free Report) continues its award-winning spree and recently won a Front-End Engineering Design (“FEED”) and project management services contract for Oman Liquefied Natural Gas LLC in Qalhat, Oman.

Oman LNG operates three liquefaction trains, with a total nameplate capacity of 10.4 million tonnes per annum.

The new contract will enable KBR to expand its footprint in the Middle East. Revenues associated with this contract were not disclosed, and will be booked into backlog of unfilled orders in second-quarter 2017 for KBR's Engineering & Construction business segment.

KBR has won several contracts in the recent past, which should reflect well on its top line in the coming quarters. Earlier this week, KBR clinched an Operator Training Simulator and a Reliability Based Maintenance services contract from JSC EuroChem Northwest for an ammonia plant in Kingisepp, Russia. The associated revenue was to be booked into the backlog of unfilled orders for the company’s Technology & Consulting Business Segment in two installments.

KBR, Inc. Price and Consensus

The company also secured an alliance contract by the Victorian Government for railroad crossing removal projects in Victoria, Australia. Expected revenue from this contract will be included in the company’s second-quarter 2017 backlog of unfilled orders for its Engineering and Construction business.

However, KBR’s Engineering and Construction segment has been facing execution issues in certain major projects, which have hurt the company’s performance. Huge cash outflows to fund losses on the EPC projects are also posing concerns for this Zacks Rank #3 (Hold) company. Further, KBR has had a dismal run on the bourse lately, losing 13.3% year to date, wider than the Zacks categorized Engineering/R&D Services industry’s average loss of 10%.

Stocks to Consider

KBR presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include TopBuild Corp. (BLD - Free Report) , Dycom Industries, Inc (DY - Free Report) and EMCOR Group, Inc. (EME - Free Report) . While TopBuild sports a Zacks Rank #1 (Strong Buy), Dycom Industries and EMCOR Group carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

TopBuild has a positive average earnings surprise of 6.0% for the last four quarters, having beaten estimates thrice.

Dycom has a positive average earnings surprise of 17.30% for the last four quarters, having beaten estimates all through.

EMCOR Group has a decent earnings beat history, having surpassed estimates thrice over the trailing four quarters. It has an average positive surprise of 15.4% over the same time frame.

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