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KBR's Q4 Earnings Beat, Revenues Miss Estimates, Backlog High
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KBR, Inc. (KBR - Free Report) reported mixed results for fourth-quarter 2023 (ended Dec 29), wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same.
The top line increased on a year-over-year basis while the bottom line remained stable. Shares of the company gained 3.9% on Feb 20, after the earnings release. The company gained on strong underlying businesses as well as excellent bookings in the reported quarter.
Impressively, KBR’s board hiked its quarterly regular dividend by 11% from 13.5 cents per share to 15 cents, marking the fifth successive year of dividend increases. KBR will pay out its quarterly dividend on Apr 15, 2024, to shareholders on record as of Mar 15.
Additionally, the board authorized replenishment of its share repurchase authorization to $500 million.
Inside the Headlines
Adjusted earnings of 69 cents per share topped the consensus estimate of 68 cents by 1.5% and remained at par from a year ago.
Total revenues of $1.73 billion missed the consensus mark of $1.77 billion by 2.2% but grew 7.6% year over year. The upside was mainly driven by new and on-contract growth across Defense & Intel, Science & Space, and International within the Government Solutions unit and growing demand for the Sustainable Technology Solutions business.
Adjusted EBITDA increased 19.7% year over year to $188 million in the quarter. Adjusted EBITDA margin was up 110 basis points to 10.9%. Our model expected adjusted EBITDA to grow 11.5% year over year to $175.1 million and adjusted EBITDA margin of 9.8% in the quarter.
Segmental & Backlog Details
Revenues in the Government Solutions or GS segment increased 5.7% year over year to $1.33 billion. The upside was backed by new and on-contract growth across its businesses. Our model predicted that the segment revenues would grow 9.4% to $1.37 billion in the quarter.
Adjusted EBITDA was $128 million, up from the prior-year quarter’s $118 million figure. Also, adjusted EBITDA margin of 9.6% grew 20 bps year over year. The segment benefited from the favorable international mix, excellent award fees and strong project execution.
Sustainable Technology Solutions' or STS revenues rose 14.2% year over year to $402 million, driven by increased sustainable services and technology. Our model predicted that the segment revenues would grow 14.6% to $403.5 million in the quarter.
Adjusted EBITDA increased to $85 million from $60 million a year ago. Adjusted EBITDA margin for the segment was up 310 basis points to 21.1%. This was attributable to a favorable revenue mix, the achievement of certain licensing milestones, joint venture performance and increased demand.
As of Dec 29, 2023, the total backlog (including award options of $4.4 billion) was $21.73 billion compared with $19.76 billion at 2022-end. Of the total backlog, Government Solutions booked $12.79 billion. The Sustainable Technology Solutions segment accounted for $4.55 billion of the total backlog.
At the end of 2023, the company delivered a trailing 12-month book-to-bill of 1.1x and recorded $10.5 billion in bookings and options.
2023 Highlights
Adjusted earnings came in at $2.91 per share, up from $2.71 a year ago. The upside was led by higher operating income, partially offset by higher interest expenses.
Total revenues grew 6% year over year to $6.96 billion. Revenues excluding OAW also increased 11% on the back of new and on-contract growth across all GS businesses and growing demand across the STS segment.
Adjusted EBITDA increased 11.8% to $747 million from 2022. Adjusted EBITDA margin expanded 50 basis points to 10.7% from 2022.
Liquidity & Cash Flow
As of Dec 29, 2023, KBR’s cash and cash equivalents were $304 million, down from $389 million at 2022-end. Long-term debt was $1.8 million at the fourth quarter of 2023-end, down from $1.38 million at 2022-end.
In 2023, cash provided by operating activities totaled $331 million, down from $396 million in the year-ago period. It had an adjusted free cash flow of $383 million, up from $353 million a year ago.
2024 Guidance
KBR expects total revenues in the range of $7.4-$7.7 billion and an adjusted EBITDA between $810 and $850 million.
Adjusted earnings per share is projected to be in the band of $3.10-$3.30. Operating cash flow is projected to be in the range of $450-$480 million.
AECOM (ACM - Free Report) reported decent results for first-quarter fiscal 2024, with earnings surpassing the Zacks Consensus Estimate. On a year-over-year basis, the top and bottom lines increased, backed by solid organic net service revenues (NSR) growth in its design business.
ACM anticipates generating 8-10% organic NSR growth in fiscal 2024. It expects adjusted earnings in the range of $4.35-$4.55 per share. This indicates a 20% improvement from the fiscal 2023 levels on a constant-currency basis, considering the mid-point of the guidance.
Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed fourth-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis. Revenues missed the consensus mark but rose year over year.
Going forward, MLM anticipates strong demand for infrastructure, large-scale energy and domestic manufacturing projects. This will largely offset weaker residential demand and the anticipated softening in light non-residential activity. With mortgage rates stabilizing and affordability headwinds receding, MLM fully expects single-family residential construction to recover as demand still exceeds supply, particularly in its key markets.
Vulcan Materials Company (VMC - Free Report) reported strong results for fourth-quarter 2023, wherein earnings and revenues surpassed their respective Zacks Consensus Estimate. On a year-over-year basis, both metrics increased year over year.
This performance can be attributed to the consistent strategic execution and the strong performance of its aggregates-led business. Additionally, large industrial projects contributed to its better-than-expected results.
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KBR's Q4 Earnings Beat, Revenues Miss Estimates, Backlog High
KBR, Inc. (KBR - Free Report) reported mixed results for fourth-quarter 2023 (ended Dec 29), wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same.
The top line increased on a year-over-year basis while the bottom line remained stable. Shares of the company gained 3.9% on Feb 20, after the earnings release. The company gained on strong underlying businesses as well as excellent bookings in the reported quarter.
Impressively, KBR’s board hiked its quarterly regular dividend by 11% from 13.5 cents per share to 15 cents, marking the fifth successive year of dividend increases. KBR will pay out its quarterly dividend on Apr 15, 2024, to shareholders on record as of Mar 15.
Additionally, the board authorized replenishment of its share repurchase authorization to $500 million.
Inside the Headlines
Adjusted earnings of 69 cents per share topped the consensus estimate of 68 cents by 1.5% and remained at par from a year ago.
KBR, Inc. Price, Consensus and EPS Surprise
KBR, Inc. price-consensus-eps-surprise-chart | KBR, Inc. Quote
Total revenues of $1.73 billion missed the consensus mark of $1.77 billion by 2.2% but grew 7.6% year over year. The upside was mainly driven by new and on-contract growth across Defense & Intel, Science & Space, and International within the Government Solutions unit and growing demand for the Sustainable Technology Solutions business.
Adjusted EBITDA increased 19.7% year over year to $188 million in the quarter. Adjusted EBITDA margin was up 110 basis points to 10.9%. Our model expected adjusted EBITDA to grow 11.5% year over year to $175.1 million and adjusted EBITDA margin of 9.8% in the quarter.
Segmental & Backlog Details
Revenues in the Government Solutions or GS segment increased 5.7% year over year to $1.33 billion. The upside was backed by new and on-contract growth across its businesses. Our model predicted that the segment revenues would grow 9.4% to $1.37 billion in the quarter.
Adjusted EBITDA was $128 million, up from the prior-year quarter’s $118 million figure. Also, adjusted EBITDA margin of 9.6% grew 20 bps year over year. The segment benefited from the favorable international mix, excellent award fees and strong project execution.
Sustainable Technology Solutions' or STS revenues rose 14.2% year over year to $402 million, driven by increased sustainable services and technology. Our model predicted that the segment revenues would grow 14.6% to $403.5 million in the quarter.
Adjusted EBITDA increased to $85 million from $60 million a year ago. Adjusted EBITDA margin for the segment was up 310 basis points to 21.1%. This was attributable to a favorable revenue mix, the achievement of certain licensing milestones, joint venture performance and increased demand.
As of Dec 29, 2023, the total backlog (including award options of $4.4 billion) was $21.73 billion compared with $19.76 billion at 2022-end. Of the total backlog, Government Solutions booked $12.79 billion. The Sustainable Technology Solutions segment accounted for $4.55 billion of the total backlog.
At the end of 2023, the company delivered a trailing 12-month book-to-bill of 1.1x and recorded $10.5 billion in bookings and options.
2023 Highlights
Adjusted earnings came in at $2.91 per share, up from $2.71 a year ago. The upside was led by higher operating income, partially offset by higher interest expenses.
Total revenues grew 6% year over year to $6.96 billion. Revenues excluding OAW also increased 11% on the back of new and on-contract growth across all GS businesses and growing demand across the STS segment.
Adjusted EBITDA increased 11.8% to $747 million from 2022. Adjusted EBITDA margin expanded 50 basis points to 10.7% from 2022.
Liquidity & Cash Flow
As of Dec 29, 2023, KBR’s cash and cash equivalents were $304 million, down from $389 million at 2022-end. Long-term debt was $1.8 million at the fourth quarter of 2023-end, down from $1.38 million at 2022-end.
In 2023, cash provided by operating activities totaled $331 million, down from $396 million in the year-ago period. It had an adjusted free cash flow of $383 million, up from $353 million a year ago.
2024 Guidance
KBR expects total revenues in the range of $7.4-$7.7 billion and an adjusted EBITDA between $810 and $850 million.
Adjusted earnings per share is projected to be in the band of $3.10-$3.30. Operating cash flow is projected to be in the range of $450-$480 million.
Zacks Rank & Recent Construction Releases
KBR currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AECOM (ACM - Free Report) reported decent results for first-quarter fiscal 2024, with earnings surpassing the Zacks Consensus Estimate. On a year-over-year basis, the top and bottom lines increased, backed by solid organic net service revenues (NSR) growth in its design business.
ACM anticipates generating 8-10% organic NSR growth in fiscal 2024. It expects adjusted earnings in the range of $4.35-$4.55 per share. This indicates a 20% improvement from the fiscal 2023 levels on a constant-currency basis, considering the mid-point of the guidance.
Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed fourth-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis. Revenues missed the consensus mark but rose year over year.
Going forward, MLM anticipates strong demand for infrastructure, large-scale energy and domestic manufacturing projects. This will largely offset weaker residential demand and the anticipated softening in light non-residential activity. With mortgage rates stabilizing and affordability headwinds receding, MLM fully expects single-family residential construction to recover as demand still exceeds supply, particularly in its key markets.
Vulcan Materials Company (VMC - Free Report) reported strong results for fourth-quarter 2023, wherein earnings and revenues surpassed their respective Zacks Consensus Estimate. On a year-over-year basis, both metrics increased year over year.
This performance can be attributed to the consistent strategic execution and the strong performance of its aggregates-led business. Additionally, large industrial projects contributed to its better-than-expected results.