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KBR (KBR) Up 16.5% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for KBR Inc. (KBR - Free Report) . Shares have added about 16.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is KBR due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
KBR's Q4 Earnings and Revenues Surpass Estimates, Up Y/Y
KBR, Inc. reported impressive fourth-quarter 2021 results, wherein earnings and revenues topped the Zacks Consensus Estimate. The company benefited from solid Government Solutions organic growth and strong execution across the business.
Elaborating on the quarterly performance, Stuart Bradie, KBR’s president and CEO, said, "KBR had a stellar 2021 delivering significant progress toward its 2025 growth strategy.” He also added, “We extended our high-end capabilities in attractive, growing end markets across international defense and renewable energy with the acquisition of Frazer-Nash Consultancy, and we formed important alliances to advance ground-breaking technology to close the circular plastics loop and make carbon-free energy a reality.”
Inside the Headline Numbers
Adjusted earnings of 69 cents per share surpassed the consensus estimate of 65 cents by 6.2% and increased 35.3% from 51 cents reported a year ago.
Total revenues also increased 70.5% year over year to $2,499 million. The top line also surpassed the consensus mark of $2,485 million by 0.6%.
Adjusted EBITDA increased 27.4% year over year to $172 million for the quarter driven by a strong performance of the Government Solution business, acquisitions and solid project execution.
Segmental Details
Revenues in the Government Solutions segment increased 98.4% year over year to $2,199 million. Yet, Sustainable Technology Solutions' revenues decreased 16.4% year over year to $300 million.
Backlog
As of Dec 31, 2021, total backlog (including award options) was $19.71 billion compared with $19.01 billion at 2020-end. Of the total backlog, Government Solutions booked $12.63 billion. The Sustainable Technology Solutions segment accounted for $2.35 billion of the total backlog.
Liquidity & Cash Flow
As of Dec 31, 2021, KBR’s cash and cash equivalents were $370 million, down from $436 million at 2020-end. Long-term debt was $1,852 million at 2021-end, up from $1,584 million at 2020-end.
For 2021, cash provided by operating activities totaled $278 million, down from $367 million in the year-ago period.
2021 Highlights
Adjusted earnings came in at $2.42 per share, reflecting an increase of 39.9% from the 2020 level. Revenues of $7,339 million increased 27.3% year over year. Adjusted EBITDA was $625 million, up 30.8% from 2020. Adjusted free cash flow was $289 million, up from $270 million a year ago.
2022 Guidance
For 2022, the company expects total revenues in the range of $6.3-$6.8 billion and adjusted EBITDA margin of 10%. Also, it expects an effective tax rate between 24% and 25% and adjusted earnings per share in the band of $2.45-$2.60. The Zacks Consensus Estimate for 2022 earnings per share is currently pegged at $2.46.
Meanwhile, adjusted operating cash flow is now projected in the range of $350-$400 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 10.77% due to these changes.
VGM Scores
At this time, KBR has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, KBR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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KBR (KBR) Up 16.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for KBR Inc. (KBR - Free Report) . Shares have added about 16.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is KBR due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
KBR's Q4 Earnings and Revenues Surpass Estimates, Up Y/Y
KBR, Inc. reported impressive fourth-quarter 2021 results, wherein earnings and revenues topped the Zacks Consensus Estimate. The company benefited from solid Government Solutions organic growth and strong execution across the business.
Elaborating on the quarterly performance, Stuart Bradie, KBR’s president and CEO, said, "KBR had a stellar 2021 delivering significant progress toward its 2025 growth strategy.” He also added, “We extended our high-end capabilities in attractive, growing end markets across international defense and renewable energy with the acquisition of Frazer-Nash Consultancy, and we formed important alliances to advance ground-breaking technology to close the circular plastics loop and make carbon-free energy a reality.”
Inside the Headline Numbers
Adjusted earnings of 69 cents per share surpassed the consensus estimate of 65 cents by 6.2% and increased 35.3% from 51 cents reported a year ago.
Total revenues also increased 70.5% year over year to $2,499 million. The top line also surpassed the consensus mark of $2,485 million by 0.6%.
Adjusted EBITDA increased 27.4% year over year to $172 million for the quarter driven by a strong performance of the Government Solution business, acquisitions and solid project execution.
Segmental Details
Revenues in the Government Solutions segment increased 98.4% year over year to $2,199 million. Yet, Sustainable Technology Solutions' revenues decreased 16.4% year over year to $300 million.
Backlog
As of Dec 31, 2021, total backlog (including award options) was $19.71 billion compared with $19.01 billion at 2020-end. Of the total backlog, Government Solutions booked $12.63 billion. The Sustainable Technology Solutions segment accounted for $2.35 billion of the total backlog.
Liquidity & Cash Flow
As of Dec 31, 2021, KBR’s cash and cash equivalents were $370 million, down from $436 million at 2020-end. Long-term debt was $1,852 million at 2021-end, up from $1,584 million at 2020-end.
For 2021, cash provided by operating activities totaled $278 million, down from $367 million in the year-ago period.
2021 Highlights
Adjusted earnings came in at $2.42 per share, reflecting an increase of 39.9% from the 2020 level. Revenues of $7,339 million increased 27.3% year over year. Adjusted EBITDA was $625 million, up 30.8% from 2020. Adjusted free cash flow was $289 million, up from $270 million a year ago.
2022 Guidance
For 2022, the company expects total revenues in the range of $6.3-$6.8 billion and adjusted EBITDA margin of 10%. Also, it expects an effective tax rate between 24% and 25% and adjusted earnings per share in the band of $2.45-$2.60. The Zacks Consensus Estimate for 2022 earnings per share is currently pegged at $2.46.
Meanwhile, adjusted operating cash flow is now projected in the range of $350-$400 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 10.77% due to these changes.
VGM Scores
At this time, KBR has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, KBR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.