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KBR Nabs $640M Contract for NASA Missions, Lifts Backlog

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KBR, Inc. (KBR - Free Report) has nabbed a Ground Systems and Mission Operations-3 (GSMO-3) contract to support NASA on their critical missions.

This five-year contract, valued at $640 million, entitles KBR to support more than 10 NASA exploration missions. The scope of work for KBR under this indefinite-delivery/indefinite-quantity contract includes systems engineering, facility engineering, launch and early orbit support as well as flight operations and dynamics.

In connection with the latest award, Stuart Bradie, KBR president and CEO, said, “This long-term collaboration further enhances our promise to advance the future of spaceflight, and we look forward to working with the incredible people at Goddard to expand our knowledge of Earth and beyond."

KBR secured this contract following its support on NASA's Ground Systems and Mission Operations-2 (GSMO-2) contract. As part of this follow-on contract, KBR will uphold a wide range of concept and operation studies, formulation development, sustainment engineering, and decommissioning.

KBR, one of the world's largest human spaceflight support organizations, operates at 11 NASA centers and facilities.

Solid Backlog: A Boon

KBR’s solid backlog level of $14.97 billion (as of Dec 31, 2021) highlights its underlying strength. This was backed by a solid contract-winning spree, strong project execution, and impressive performance from its government and technology businesses. Nearly 84% of the backlog represents work in Government Solutions. The majority of these are long-term reimbursable service annuity-type contracts with significantly lower risks than some of the other projects.

Government Solutions generated revenues of $6.1 billion in fiscal 2021, reflecting a 52% increase from 2020 (36% organic). The growth is attributable to organic growth delivered across each government business. Government Solutions booked $12.63 billion of backlog at 2021-end, up from $12.66 billion at 2020-end.

Share Price Performance

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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 11.6% year to date, outperforming the Zacks Engineering - R and D Services industry’s 6% rise.

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.

Fluor Corporation (FLR - Free Report) : Fluor — a Zacks Rank #1 company — is gaining from the "Building a Better Future" initiative, which is focused on enhancing markets outside the traditional oil and gas sector, fair and balanced commercial deals, financial discipline, and high-performing business culture. It made significant progress toward strategic goals that comprise the reduction of outstanding debt by 30% and identified ways for more than $150 million in annual cost savings.

Over the past 30 days, FLR’s earnings estimates for 2022 have increased from $1.12 to $1.34 per share, indicating 45.6% year-over-year growth.

Sterling Construction Company, Inc. (STRL - Free Report) : Sterling — a Zacks Rank #2 (Buy) company — has been benefiting from broad-based growth across the E-Infrastructure, Building and Transportation solutions segments.

STRL’s earnings estimates for the year have increased to $2.80 from $2.63 over the past 30 days. The revised projection suggests a year-over-year improvement of 30.2%.

AECOM (ACM - Free Report) : AECOM — a Zacks Rank #2 company — is a leading solutions provider of supporting professional, technical, and management solutions for diverse industries across end markets. ACM has been continuously focusing on delivering industry-leading margins and unlocking capital to promote growth as well as innovation. Also, AECOM’s focus on higher-margin and lower-risk Professional Services businesses bodes well.

Over the past 60 days, ACM’s earnings estimates for 2022 have increased from $3.30 to $3.40 per share, which implies a year-over-year jump of 20.6%.


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