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KBR Wins $91.8M Engineering Services Contract From USAF

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KBR, Inc. (KBR - Free Report) has won a $91.8-milion high-end engineering services contract from the U.S. Air Force (USAF) to research, analyze and develop solutions for the latter’s aircraft and other system components managed by the 448th Supply Chain Management Wing.

Byron Bright, KBR President, Government Solutions said, "Our work will directly address key performance attributes for reliability, maintainability and supply chain performance, thereby increasing overall effectiveness for the Air Force."

Within this cost-plus-fixed-fee task order, KBR will support the Air Force to address Diminishing Manufacturing Sources and Material Shortages issues associated with increasing aircraft age, such as fatigue cracking, reduced damage tolerance and corrosion. Also, it will provide engineering analyses of electronic warfare systems and components as well as assess fundamental design requirements, logistics supportability along with life-limiting degradation issues.

This apart, it will assess software and security impacts as well as modify requirements due to platform needs or redesign efforts, and evaluate aircraft fleet status. This indefinite delivery, indefinite quantity contact will be carried out in Georgia, Oklahoma, and Utah as well as other locations in the next five years.

Government Solutions Business in Focus

Government Solutions, which accounted for 68.2% of 2020 revenues, mainly focuses on long-term service contracts with annuity streams for the United Kingdom, Australian and U.S. governments. The company has been offering full spectrum of engineering and technical services across the life cycle of military systems for the U.S. and allied nations. The scope of work includes acquisition, systems engineering and integration, AI/big data applications, assured microelectronics, rapid prototyping, research and development as well as test and evaluation.

Since 2005, KBR — which share space with Jacobs Engineering Group Inc. (J - Free Report) , Mayville Engineering Company, Inc. (MEC - Free Report) and Altair Engineering Inc. (ALTR - Free Report) in the Zacks Engineering - R and D Services industry — has supported the mission of the DoD research and development community through various predecessor DoD Information Analysis Center contracts. In fact, it has provided similar services to the Air Force Life Cycle Management Command since 2005.

KBR’s shares have surged 33.7% in the past three months compared with the industry’s 18.2% rally. Also, earnings estimates for 2021 have moved up 0.5% over the past 30 days, depicting analysts' optimism over bottom-line growth potential. It is banking on strength of the Government Solutions business to drive growth. The company is optimistic about healthy revenue growth from the segment in 2021.

Zacks Investment ResearchImage Source: Zacks Investment Research

The Zacks Consensus Estimate for the Zacks Rank #3 (Hold) company’s 2021 earnings indicates a 22% increase from 2020. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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