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KBR's JV Receives Contract From BP Exploration in Azerbaijan
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SOCAR-KBR (SKLLC), a joint venture (JV) company of KBR, Inc. (KBR - Free Report) , won an optimization stage engineering services contract from the BP Exploration (Shah Deniz) Limited to support the Shah Deniz compression project in the Azerbaijan sector of the Caspian Sea.
Per the contract, the JV will provide class-3 engineering services to help BP optimize the project. The deal’s scope also includes engineering to enable integration of the new platform to the existing system and provide shore power to reduce the carbon footprint in support of BP's net-zero targets. The Shah Deniz compression project will be the first in the Caspian region to feature crewless operations, delivering unprecedented process optimization through cutting-edge, high-end technology.
Jay Ibrahim, president of KBR's Sustainable Technology Solutions business, stated, "We look forward to working with BP to achieve their goals of introducing novel, crewless operations to the region, while also lowering their carbon footprint, reducing operating costs, and eliminating personnel risks associated with such projects. KBR's technical innovation is paving the way for clients to more easily navigate their energy transition journey toward net zero."
Recently, KBR completed the initial assessment for this flagship project using its proprietary KMIT (KBR Maintenance Information Tool) to provide detailed estimates of the timing and resourcing of maintenance.
Image Source: Zacks Investment Research
The stock fell 0.34% on Nov 17, post news release, but outperformed the Zacks Engineering - R and D Services industry in the past six months. KBR’s shares have gained 8.2% in the said period compared with the industry’s 3.4% rise.
SKLLC is a joint venture between KBR and Azerbaijan's state oil company — SOCAR.
Solid Backlog Level, Upbeat Views
KBR is a leader in energy transition and has extensive experience supporting sustainable energy projects across the globe. For more than 50 years, KBR has been leading the process technology development, commercialization and plant design solutions industry. KBR’s best-in-class technologies have been designing and building end-to-end, sophisticated digitization solutions and services for clients across the world.
These digitized technologies and solutions help companies increase efficiency and productivity, reduce costs and create opportunities to generate higher revenues and profitability. It has been driving growth by focusing on lowering carbon emissions, product diversification, energy efficiency, and more sustainable technologies and solutions.
KBR’s solid backlog level of $15.77 billion (as of Sep 30, 2022) reflects its underlying strength. The company’s impressive 2021 and the first nine months of 2022 performances demonstrated its unwavering focus and superb business execution. Solid double-digit top-line growth, strong organic growth in the Government Solutions unit and robust adjusted EBITDA growth are commendable. The impressive performance was backed by a solid contract-winning spree, strong project execution, backlog level and potential government and technology businesses.
Sustainable Technology Solutions business revenues increased 15.6% year over year in the third quarter. STS benefited from strong end markets, superior technology offerings and highly sought-after engineering solutions.
Backed by favorable market tailwinds, good booking momentum, and strong first nine months of 2022, KBR lifted strong 2022 guidance. For 2022, the company now expects total revenues in the range of $6.5-$6.7 billion (versus $6.4-$6.8 billion expected earlier) and an adjusted EBITDA margin of 10%. It expects an effective tax rate between 23% and 24% (versus the earlier projections of 24% and 25%) and adjusted earnings per share in the band of $2.60-$2.65 (compared with $2.53-$2.65 expected before). Adjusted operating cash flow is projected in the range of $375-$400 million (versus an earlier projection of $360-$400 million).
In 2021, it generated total revenues of $7.34 billion, an adjusted EBITDA margin of 8.5% and adjusted earnings of $2.42 per share. It had an adjusted operating cash flow of $319 million.
Some better-ranked stocks, which warrant a look in the same industry, include Willdan Group, Inc. (WLDN - Free Report) , Sterling Infrastructure, Inc. (STRL - Free Report) and Altair Engineering Inc. (ALTR - Free Report) , each carrying a Zacks Rank #2 (Buy).
Willdan is a nationwide provider of professional, technical, and consulting services to utilities, government agencies, and private industry.
WLDN’s expected earnings growth rate for 2023 is 18.5%.
Sterling Infrastructure provides transportation, e-infrastructure and building solutions.
STRL’s expected earnings growth rate for 2022 and 2023 is 47.4% and 6.3%, respectively.
Altair Engineering provides software and cloud solutions in simulation, high-performance computing, data analytics, and artificial intelligence worldwide.
ALTR’s expected earnings growth rate for 2022 and 2023 is 10.6% and 21.5%, respectively.
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KBR's JV Receives Contract From BP Exploration in Azerbaijan
SOCAR-KBR (SKLLC), a joint venture (JV) company of KBR, Inc. (KBR - Free Report) , won an optimization stage engineering services contract from the BP Exploration (Shah Deniz) Limited to support the Shah Deniz compression project in the Azerbaijan sector of the Caspian Sea.
Per the contract, the JV will provide class-3 engineering services to help BP optimize the project. The deal’s scope also includes engineering to enable integration of the new platform to the existing system and provide shore power to reduce the carbon footprint in support of BP's net-zero targets. The Shah Deniz compression project will be the first in the Caspian region to feature crewless operations, delivering unprecedented process optimization through cutting-edge, high-end technology.
Jay Ibrahim, president of KBR's Sustainable Technology Solutions business, stated, "We look forward to working with BP to achieve their goals of introducing novel, crewless operations to the region, while also lowering their carbon footprint, reducing operating costs, and eliminating personnel risks associated with such projects. KBR's technical innovation is paving the way for clients to more easily navigate their energy transition journey toward net zero."
Recently, KBR completed the initial assessment for this flagship project using its proprietary KMIT (KBR Maintenance Information Tool) to provide detailed estimates of the timing and resourcing of maintenance.
Image Source: Zacks Investment Research
The stock fell 0.34% on Nov 17, post news release, but outperformed the Zacks Engineering - R and D Services industry in the past six months. KBR’s shares have gained 8.2% in the said period compared with the industry’s 3.4% rise.
SKLLC is a joint venture between KBR and Azerbaijan's state oil company — SOCAR.
Solid Backlog Level, Upbeat Views
KBR is a leader in energy transition and has extensive experience supporting sustainable energy projects across the globe. For more than 50 years, KBR has been leading the process technology development, commercialization and plant design solutions industry. KBR’s best-in-class technologies have been designing and building end-to-end, sophisticated digitization solutions and services for clients across the world.
These digitized technologies and solutions help companies increase efficiency and productivity, reduce costs and create opportunities to generate higher revenues and profitability. It has been driving growth by focusing on lowering carbon emissions, product diversification, energy efficiency, and more sustainable technologies and solutions.
KBR’s solid backlog level of $15.77 billion (as of Sep 30, 2022) reflects its underlying strength. The company’s impressive 2021 and the first nine months of 2022 performances demonstrated its unwavering focus and superb business execution. Solid double-digit top-line growth, strong organic growth in the Government Solutions unit and robust adjusted EBITDA growth are commendable. The impressive performance was backed by a solid contract-winning spree, strong project execution, backlog level and potential government and technology businesses.
Sustainable Technology Solutions business revenues increased 15.6% year over year in the third quarter. STS benefited from strong end markets, superior technology offerings and highly sought-after engineering solutions.
Backed by favorable market tailwinds, good booking momentum, and strong first nine months of 2022, KBR lifted strong 2022 guidance. For 2022, the company now expects total revenues in the range of $6.5-$6.7 billion (versus $6.4-$6.8 billion expected earlier) and an adjusted EBITDA margin of 10%. It expects an effective tax rate between 23% and 24% (versus the earlier projections of 24% and 25%) and adjusted earnings per share in the band of $2.60-$2.65 (compared with $2.53-$2.65 expected before). Adjusted operating cash flow is projected in the range of $375-$400 million (versus an earlier projection of $360-$400 million).
In 2021, it generated total revenues of $7.34 billion, an adjusted EBITDA margin of 8.5% and adjusted earnings of $2.42 per share. It had an adjusted operating cash flow of $319 million.
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, which warrant a look in the same industry, include Willdan Group, Inc. (WLDN - Free Report) , Sterling Infrastructure, Inc. (STRL - Free Report) and Altair Engineering Inc. (ALTR - Free Report) , each carrying a Zacks Rank #2 (Buy).
Willdan is a nationwide provider of professional, technical, and consulting services to utilities, government agencies, and private industry.
WLDN’s expected earnings growth rate for 2023 is 18.5%.
Sterling Infrastructure provides transportation, e-infrastructure and building solutions.
STRL’s expected earnings growth rate for 2022 and 2023 is 47.4% and 6.3%, respectively.
Altair Engineering provides software and cloud solutions in simulation, high-performance computing, data analytics, and artificial intelligence worldwide.
ALTR’s expected earnings growth rate for 2022 and 2023 is 10.6% and 21.5%, respectively.