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KBR, Inc. (KBR - Free Report) reported mixed results for first-quarter 2022, with earnings topping the Zacks Consensus Estimate and revenues missing the same. On a year-over-year basis, the metrics increased strongly. The company benefited from solid Government Solutions growth and strong execution across the business.
Yet, shares of the company fell 4.14% on Apr 28, post the earnings release.
Elaborating on the quarterly performance, Stuart Bradie, KBR’s president and CEO, said, "Given the accelerating demand for our domain expertise, innovative solutions, and proprietary technologies, we are increasing our full-year 2022 revenue, adjusted earnings per share, operating cash flow and adjusted operating cash flow guidance.”
Inside the Headline Numbers
Adjusted earnings of 62 cents per share surpassed the consensus estimate of 57 cents by 8.8% and increased 29% from 48 cents reported a year ago.
Total revenues increased 17% year over year to $1.71 billion. The top line missed the consensus mark of $1.74 billion by 1.6%.
Adjusted EBITDA increased 14.1% year over year to $154 million in the quarter, driven by a strong performance of the Government Solutions business, acquisitions and solid project execution.
Segmental Details
Revenues in the Government Solutions segment increased 25.3% year over year to $1,459 million. Sustainable Technology Solutions' revenues declined 14.1% year over year to $255 million.
Backlog
As of Mar 31, 2022, the total backlog (including award options) was $18.55 billion compared with $19.70 billion at 2021-end. Of the total backlog, Government Solutions booked $11.57 billion. The Sustainable Technology Solutions segment accounted for $2.41 billion of the total backlog.
Liquidity & Cash Flow
As of Mar 31, 2022, KBR’s cash and cash equivalents were $412 million, up from $370 million at the 2021-end. Long-term debt was $1,870 million at the first quarter-end, slightly down from $1,875 million at the 2021-end.
In the first quarter, cash provided by operating activities totaled $89 million, up from $50 million in the year-ago period.
2022 Guidance Updated
Backed by favorable market tailwinds, good bookings momentum, a strong first quarter, and work under a contract of more than 85% to deliver 2022 results, KBR lifted its revenue guidance. For 2022, the company now expects total revenues in the range of $6.4-$6.8 billion ($6.3-$6.8 expected earlier) and an 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 $2.53-$2.65. Earlier, it had expected adjusted earnings per share (EPS) within the $2.45-$2.60 range. 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 $360-$400 million, raising the lower range of the previously guided range by $10 million.
Armstrong World Industries, Inc. (AWI - Free Report) reported unimpressive results in first-quarter 2022. The top and the bottom line missed their respective Zacks Consensus Estimate but increased on a year-over-year basis. The upside can be attributed to solid pricing actions and strong execution of growth opportunities in the Architectural Specialties segment and digital and Healthy Spaces initiatives.
Armstrong World noted that lower Mineral Fiber sales volumes and equity earnings, primarily due to reductions in distributor inventory levels, affected the results.
Masco Corporation (MAS - Free Report) reported solid results in first-quarter 2022. The top and the bottom line surpassed the Zacks Consensus Estimate and improved on a year-over-year basis.
The upside was mainly backed by solid demand for its products and operational efficiencies.
Otis Worldwide Corporation (OTIS - Free Report) reported strong results in first-quarter 2022. Its earnings surpassed the Zacks Consensus Estimate and improved on a year-over-year basis.
Sales also improved from the year-ago figure but marginally lagged the consensus mark.
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KBR's Stock Falls Despite Q1 Earnings Beating Estimates
KBR, Inc. (KBR - Free Report) reported mixed results for first-quarter 2022, with earnings topping the Zacks Consensus Estimate and revenues missing the same. On a year-over-year basis, the metrics increased strongly. The company benefited from solid Government Solutions growth and strong execution across the business.
Yet, shares of the company fell 4.14% on Apr 28, post the earnings release.
Elaborating on the quarterly performance, Stuart Bradie, KBR’s president and CEO, said, "Given the accelerating demand for our domain expertise, innovative solutions, and proprietary technologies, we are increasing our full-year 2022 revenue, adjusted earnings per share, operating cash flow and adjusted operating cash flow guidance.”
Inside the Headline Numbers
Adjusted earnings of 62 cents per share surpassed the consensus estimate of 57 cents by 8.8% and increased 29% from 48 cents reported a year ago.
KBR, Inc. Price, Consensus and EPS Surprise
KBR, Inc. price-consensus-eps-surprise-chart | KBR, Inc. Quote
Total revenues increased 17% year over year to $1.71 billion. The top line missed the consensus mark of $1.74 billion by 1.6%.
Adjusted EBITDA increased 14.1% year over year to $154 million in the quarter, driven by a strong performance of the Government Solutions business, acquisitions and solid project execution.
Segmental Details
Revenues in the Government Solutions segment increased 25.3% year over year to $1,459 million. Sustainable Technology Solutions' revenues declined 14.1% year over year to $255 million.
Backlog
As of Mar 31, 2022, the total backlog (including award options) was $18.55 billion compared with $19.70 billion at 2021-end. Of the total backlog, Government Solutions booked $11.57 billion. The Sustainable Technology Solutions segment accounted for $2.41 billion of the total backlog.
Liquidity & Cash Flow
As of Mar 31, 2022, KBR’s cash and cash equivalents were $412 million, up from $370 million at the 2021-end. Long-term debt was $1,870 million at the first quarter-end, slightly down from $1,875 million at the 2021-end.
In the first quarter, cash provided by operating activities totaled $89 million, up from $50 million in the year-ago period.
2022 Guidance Updated
Backed by favorable market tailwinds, good bookings momentum, a strong first quarter, and work under a contract of more than 85% to deliver 2022 results, KBR lifted its revenue guidance. For 2022, the company now expects total revenues in the range of $6.4-$6.8 billion ($6.3-$6.8 expected earlier) and an 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 $2.53-$2.65. Earlier, it had expected adjusted earnings per share (EPS) within the $2.45-$2.60 range. 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 $360-$400 million, raising the lower range of the previously guided range by $10 million.
Zacks Rank & Recent Construction Releases
KBR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Armstrong World Industries, Inc. (AWI - Free Report) reported unimpressive results in first-quarter 2022. The top and the bottom line missed their respective Zacks Consensus Estimate but increased on a year-over-year basis. The upside can be attributed to solid pricing actions and strong execution of growth opportunities in the Architectural Specialties segment and digital and Healthy Spaces initiatives.
Armstrong World noted that lower Mineral Fiber sales volumes and equity earnings, primarily due to reductions in distributor inventory levels, affected the results.
Masco Corporation (MAS - Free Report) reported solid results in first-quarter 2022. The top and the bottom line surpassed the Zacks Consensus Estimate and improved on a year-over-year basis.
The upside was mainly backed by solid demand for its products and operational efficiencies.
Otis Worldwide Corporation (OTIS - Free Report) reported strong results in first-quarter 2022. Its earnings surpassed the Zacks Consensus Estimate and improved on a year-over-year basis.
Sales also improved from the year-ago figure but marginally lagged the consensus mark.