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KBR's JV Unit to Support NASA's Space Orbital Systems & GSFC

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A joint venture between KBR, Inc. (KBR - Free Report) and Intuitive Machines, Inc. — the Space & Technology Solutions — received a 5-year, $719 million Omnibus Multidiscipline Engineering Services (OMES) III contract from NASA.

The Space & Technology Solutions team will serve NASA's most critical space orbital systems in its Applied Engineering and Technology Directorate at Goddard Space Flight Center (GSFC) in Maryland.

KBR’s Government Solutions U.S. unit will provide various services like electrical engineering, instrument systems and technology; exploration and mission support; mission engineering and systems analysis at multiple levels.

This cost-plus-fixed-fee indefinite-delivery, indefinite-quantity contract will help the primary support vehicle for the Joint Polar Satellite System program and NASA's Exploration and In-space Services projects division.

Contract Wins: A Boost for the Backlog

KBR has been gaining from the rising global importance of national security, energy security, energy transition and climate change. It has been benefiting from high-end and differentiated government business work, strong margin performance, technology and consulting services.

Shares of the company rose 17.4% in the past six months, outperforming the industry’s 12.6% growth. The trend is likely to continue, given the solid backlog level (including award options).

As of Jun 30, 2023, the total backlog (including award options) of KBR was $21.06 billion compared with $19.76 billion at 2022-end. Of the total backlog, Government Solutions booked $11.82 billion. The Sustainable Technology Solutions segment accounted for $5.06 billion of the total backlog.

At the second-quarter end, the company delivered trailing-12-months book-to-bill of 1.1x and recorded $2.2 billion in bookings and options.

Overall, KBR’s long-term, mission-critical programs provide strong visibility in volatile times. The company’s overseas logistics and mission support programs on the back of higher military exercise activities, increased outsourcing of sustainment activities by the military and the ramp-up of the new wins led to its growth. Its determination to reduce emissions, product diversification, inorganic moves and strategic alliances bode well.

Zacks Rank & Key Picks

KBR carries a Zacks Rank #3 (Hold).

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STRL’s expected earnings growth rate for 2023 is 23.4% and it sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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FLR presently sports a Zacks Rank #1. Its expected earnings growth rate for 2023 is 128.1%.

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