Back to top

Image: Bigstock

KBR Announces Contract Win From Northern Petrochemical Corp

Read MoreHide Full Article

KBR, Inc. (KBR - Free Report) has won a contract from the Northern Petrochemical Corporation to provide the license and basic engineering design for the ammonia-methanol co-production technology.

KBR and one of the global leaders in sustainable technologies — Johnson Matthey (JM) — have developed this market-leading ammonia and methanol technology for Northern Petrochemical's new facility in Alberta, Canada. Doug Kelly, KBR’s president, Technology, said, "KBR and JM have developed this co-production technology that minimizes costs and risk by utilizing reliable and well-proven sustainable processes while reducing CO2 emissions."

The project will produce blue ammonia and methanol by utilizing the latest carbon capture and storage technologies to achieve a carbon-neutral process.

Sustainable Technology Business a Boon for KBR

The Sustainable Technology Solutions segment — comprising 20.3% of the company’s total revenues — includes Energy Solutions, Technology Solutions and Non-Strategic Business segments. This segment is anchored by innovative, proprietary process technologies.

KBR’s best-in-class technologies have been designing and building end-to-end, sophisticated digitization solutions as well as services for clients across the world. This includes high-fidelity operator training simulators, reliability-based maintenance solutions, dynamic simulation solutions, advanced process control solutions and more. These notable digitized technologies and solutions allow companies to increase efficiency and productivity, reduce costs as well as create opportunities for generating higher revenues as well as profitability.

Zacks Investment ResearchImage Source: Zacks Investment Research

Since 1940, KBR has been the leading ammonia licensor that licensed, engineered, and constructed more than 245 ammonia plants across the globe. Both KBR's ammonia technology and JM's methanol technology have well-earned reputations for production reliability, and continuous improvements to further minimize capital and operating costs.

Overall, it has been driving growth by focusing on lowering carbon emissions, product diversification, energy efficiency, and more sustainable technologies as well as solutions. Demand for the company’s technologies across ammonia for food production, olefins for non-single-use plastics, and in refining for product diversification and more green solutions to meet tighter environmental standards has been strong. A strategic shift to IP-enabled maintenance is gaining traction and KBR continues to see increasing activity across the advisory portfolio, particularly in energy transition.

Quick Q3 Highlights

KBR has been performing pretty well over the last few quarters. Third-quarter earnings and revenues topped the Zacks Consensus Estimate by 12.3% and 18.8%, respectively. It also raised its full-year view. The company benefited from solid Government Solutions organic growth and strong execution across the business.

Its impressive third-quarter 2021 performance demonstrates unwavering focus and superb business execution. Solid double-digit top-line improvement, strong organic growth in the GS unit and robust adjusted EBITDA margins are commendable.

As of Sep 30, 2021, total backlog was $14.76 billion compared with $15 billion at 2020-end. Of the total backlog, Government Solutions booked $12.45 billion. The Sustainable Technology Solutions segment accounted for $2.31 billion of the total backlog.

KBR’s solid prospects are backed by continuous contract wins, strong project execution, backlog level, and potential government as well as technology businesses. KBR’s shares have gained 46.2% in the year-to-date period, outperforming the Zacks Engineering - R and D Services industry’s 36.9% rally.

Zacks Rank & Key Picks

Currently, KBR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Construction sector include Construction Partners, Inc. (ROAD - Free Report) , Installed Building Products, Inc. (IBP - Free Report) and PGT Innovations, Inc. (PGTI - Free Report) , each carrying a Zacks Rank #2 (Buy).

Construction Partners’ three-five year earnings are likely to grow 14.1%.

Installed Building and PGT Innovations’ earnings are likely to increase 33.6% and 6.2%, respectively, in 2021.