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KBR's (KBR) Wing Secures $48M Task Order from U.S. Army

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Premium technical service providing company, KBR, Inc. (KBR - Free Report) , recently fortified its Government Service business segment by securing a three-year follow-on task order worth $48 million from the U.S. Army. The order will be booked into the company’s backlog in second-quarter 2017, as unfilled orders of the segment.

KBR currently carries a Zacks Rank #4 (Sell). We believe that headwinds such as volatility in oil and gas prices, prolonged softness in the Engineering & Construction segment end markets, stiff competition, or sudden inflation in input prices might dent the company’s near-term results.

However, the company eyes growth on the back of strategic acquisitions and robust Government Services business. Over the last one month, KBR’s shares yielded a return of 5.37%, outperforming 2.56% growth recorded by the Zacks categorized Engineering/R&D Services industry.

Inside the Headlines

The latest follow-on-task order is a Defense Systems Technical Area Task contract offered by the Defense Technical Information Center, a section of the U.S. Army’s Department of Defense (DoD).

Per the deal, KBRwyle will offer project management, Foreign Military Sales, as well as engineering services to the missile defense systems of DoD. These services will be provided in the Army’s Lower Tier Project Office, located in Redstone Arsenal, Huntsville, AL. The services would help in integrating the Army’s Integrated Air and Missile Defense system, Ballistic Missile Defense System and PATRIOT Missile Defense system.

In Jul 2016, KBR strengthened its Government Services business segment with the strategic buyout of Wyle, Inc. (known as KBRwyle post the deal’s closure). The company further reinforced this segment by acquiring Honeywell Technology Solutions, Inc. (HTSI) in Sep 2016.

At present, KBR’s U.S. Government Services business, HTSI, as well as KBRwyle cater all types of services to government clients in U.S., under the brand name KBRwyle.

Stocks to Consider

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