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KBR Shares Down Despite Q1 Earnings Beat on Solid Execution
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KBR, Inc.’s (KBR - Free Report) shares fell 1.2% on Apr 29, following the announcement of first-quarter 2021 results. Although its revenues lagged the Zacks Consensus Estimate, earnings topped the same. Also, the top line declined but earnings improved year over year, given new program wins, innovative technologies, and solid execution and safety performance.
Stuart Bradie, President and CEO of KBR, said "We posted key wins in trusted microelectronics, automation, rapid prototyping, sustainable technology licensing, energy transition and more. At the same time, we continued advancing innovations in important high-growth areas such as climate change, cyber analytics and space superiority.”
Inside the Headline Numbers
Adjusted earnings of 48 cents per share surpassed the consensus estimate of 47 cents by 2.1% and increased 23.1% from 39 cents reported a year ago.
Total revenues decreased 4.9% year over year to $1,461 million. The top line lagged the consensus mark of $1,474 million by 0.9%.
Adjusted EBITDA increased 20.5% year over year to $135 million for the quarter, driven by strong performance of the Sustainable Technology business, the acquisition of Centauri and SG&A savings.
Segmental Details
Revenues in the Government Solutions segment decreased 10.5% year over year to $1.7 billion.
Sustainable Technology Solutions' revenues decreased 21.5% year over year to $3 billion.
Backlog
As of Mar 31, 2021, total backlog was $14.6 billion compared with $15.1 billion at 2020-end. Of the total backlog, Government Solutions booked $12.3 billion. Sustainable Technology Solutions segment accounted for $2.3 billion of the total backlog.
Liquidity & Cash Flow
As of Mar 31, 2021, KBR’s cash and cash equivalents were $445 million, up from $436 million at 2020-end. Long-term debt was $1.59 billion, almost in line with 2020-end.
For first-quarter 2021, cash provided by operating activities totaled $50 million compared with $41 million in 2020.
2021 Guidance Reaffirmed
For 2021, the company expects total revenues in the range of $5.8-$6.2 billion and adjusted EBITDA margin of 9%. Also, it expects effective tax rate between 25% and 26%, and adjusted earnings per share in the band of $2.00-$2.20.
Meanwhile, operating cash flow is projected in the range of $243-$283 million, while adjusted operating cash flow is estimated between $280 million and $320 million.
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KBR Shares Down Despite Q1 Earnings Beat on Solid Execution
KBR, Inc.’s (KBR - Free Report) shares fell 1.2% on Apr 29, following the announcement of first-quarter 2021 results. Although its revenues lagged the Zacks Consensus Estimate, earnings topped the same. Also, the top line declined but earnings improved year over year, given new program wins, innovative technologies, and solid execution and safety performance.
Stuart Bradie, President and CEO of KBR, said "We posted key wins in trusted microelectronics, automation, rapid prototyping, sustainable technology licensing, energy transition and more. At the same time, we continued advancing innovations in important high-growth areas such as climate change, cyber analytics and space superiority.”
Inside the Headline Numbers
Adjusted earnings of 48 cents per share surpassed the consensus estimate of 47 cents by 2.1% and increased 23.1% from 39 cents reported a year ago.
KBR, Inc. Price, Consensus and EPS Surprise
KBR, Inc. price-consensus-eps-surprise-chart | KBR, Inc. Quote
Total revenues decreased 4.9% year over year to $1,461 million. The top line lagged the consensus mark of $1,474 million by 0.9%.
Adjusted EBITDA increased 20.5% year over year to $135 million for the quarter, driven by strong performance of the Sustainable Technology business, the acquisition of Centauri and SG&A savings.
Segmental Details
Revenues in the Government Solutions segment decreased 10.5% year over year to $1.7 billion.
Sustainable Technology Solutions' revenues decreased 21.5% year over year to $3 billion.
Backlog
As of Mar 31, 2021, total backlog was $14.6 billion compared with $15.1 billion at 2020-end. Of the total backlog, Government Solutions booked $12.3 billion. Sustainable Technology Solutions segment accounted for $2.3 billion of the total backlog.
Liquidity & Cash Flow
As of Mar 31, 2021, KBR’s cash and cash equivalents were $445 million, up from $436 million at 2020-end. Long-term debt was $1.59 billion, almost in line with 2020-end.
For first-quarter 2021, cash provided by operating activities totaled $50 million compared with $41 million in 2020.
2021 Guidance Reaffirmed
For 2021, the company expects total revenues in the range of $5.8-$6.2 billion and adjusted EBITDA margin of 9%. Also, it expects effective tax rate between 25% and 26%, and adjusted earnings per share in the band of $2.00-$2.20.
Meanwhile, operating cash flow is projected in the range of $243-$283 million, while adjusted operating cash flow is estimated between $280 million and $320 million.
Zacks Rank & Peer Releases
KBR — which share space with AECOM (ACM - Free Report) , Jacobs Engineering Group Inc. (J - Free Report) and Quanta Services Inc. (PWR - Free Report) in the Zacks Engineering - R and D Services industry — currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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