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KBR, Inc.

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Over the past six months, KBR’s shares have outperformed the Zacks categorized Engineering/R&D Services industry. The company is presently facing robust prospects in the Government services and Technology & Consulting businesses, which provides excellent balance between hydrocarbons and government projects. Moreover, KBR’s greater proportion of reimbursable service annuity-type contracts in the backlog signals margin expansion, going forward. Also, KBR’s recent acquisitions are bolstering its government services business. However, on the flip side, prolonged softness in the Engineering & Construction sector, along with volatility in oil and gas prices add to KBR's woes. Also, sluggish activities in several projects approaching completion add to the company’s concerns. Moreover, long-cycle nature of the contracts, volatility in material & equipment pricing and stiff competition raise caution.


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