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KBR's JV Wins Lake Charles LNG Export Transformation Project Deal
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KBR, Inc.’s (KBR - Free Report) joint venture (JV), KTJV, has recently won a contract from a subsidiary of Energy Transfer LP — Lake Charles LNG Export Company — to support the development of its world-class LNG facility.
KTJV is a JV between KBR and Technip Energies. It will provide high-end engineering, procurement, construction management, construction, commissioning, startup and other related services to transform the Lake Charles LNG import facility into an export facility.
This project, which aims to meet growing global LNG demand, will deliver three liquefaction trains and upgrade existing storage and dock facilities to enable the export of 16.45 metric tons per year of LNG. Moreover, it is subject to Lake Charles LNG's decision to issue a notice to proceed with the project.
This initiative marks a significant step in boosting global energy security while focusing on efficiency and clean operations. KBR’s extensive experience in LNG projects, along with its partnership with Technip Energies, positions KTJV to execute this large-scale conversion successfully. The final go-ahead will depend on securing commercial offtake commitments and third-party equity.
KBR’s Stock Performance
Shares of this company have underperformed the Zacks Engineering - R and D Services industry in the past three months. KBR engages in a highly competitive sector. Macroeconomic concerns like interest rate hikes, global recession fears and sector-specific headwinds could result in overall negative sentiment in the stock market, especially in industries tied to energy and infrastructure development.
Image Source: Zacks Investment Research
That said, new and on-contract growth across its businesses and increased demand for sustainable services and technology are likely to be beneficial in the upcoming period.
KBR’s Solid Backlog Raises Hope for the Future
KBR’s strong project momentum stems from its resilient business model and efficiency-driven initiatives. The increasing global emphasis on national security, energy security, energy transition, and climate change has provided significant tailwinds. With over five decades of design engineering expertise across industries, KBR remains a leader in decarbonization efforts, utilizing innovative processes and low-carbon technologies to effectively reduce emissions.
In the second quarter of 2024, KBR received $2.1 billion in bookings and options in highly strategic areas, with a trailing 12-month book-to-bill of 1x. Total revenues increased 6% to $1.86 billion year over year. The upside was backed by growth across Sustainable Technology Solutions (STS), as well as the Government Solutions’ (GS) new and on-contract growth across International, Defense & Intel, and Science and Space, partially offset by contraction in Readiness & Sustainment due to Ukraine funding delays.
As of June 28, 2024, the total backlog (including award options of $3.332 billion) was $20.1 billion compared with $21.73 billion at 2023-end. Of the total backlog, GS booked was $12.89 billion. The STS segment contributed $3.92 billion to the total backlog.
Backed by its solid performance in the first half and improving global demand for its services, KBR raised its adjusted earnings per share (EPS) projection to the range of $3.15-$3.30 from $3.10-$3.30 expected earlier.
The Zacks Consensus Estimate for KBR’s 2024 EPS has moved up by a cent to $3.25 in the past 30 days, which reflects 11.7% year-over-year growth on a 9.4% increase in revenues.
KBR’s Zacks Rank & Other Key Picks
Currently, KBR carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the same space are:
The Zacks Consensus Estimate for STRL’s 2024 sales and EPS indicates a rise of 9.7% and 26.6%, respectively, from the prior-year levels.
Howmet Aerospace Inc. (HWM - Free Report) presently carries a Zacks Rank #2. HWM has a trailing four-quarter earnings surprise of 10.9%, on average.
The Zacks Consensus Estimate for HWM’s 2024 sales and EPS indicates a rise of 12.6% and 40.8%, respectively, from the prior-year levels.
M-tron Industries, Inc. (MPTI - Free Report) currently carries a Zacks Rank #2. It has topped earnings estimates in three of the trailing four quarters and missed once, with an average surprise of 9.2%.
The Zacks Consensus Estimate for MPTI’s 2024 sales and EPS indicates a rise of 16.1% and 76.6%, respectively, from prior-year levels.
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KBR's JV Wins Lake Charles LNG Export Transformation Project Deal
KBR, Inc.’s (KBR - Free Report) joint venture (JV), KTJV, has recently won a contract from a subsidiary of Energy Transfer LP — Lake Charles LNG Export Company — to support the development of its world-class LNG facility.
KTJV is a JV between KBR and Technip Energies. It will provide high-end engineering, procurement, construction management, construction, commissioning, startup and other related services to transform the Lake Charles LNG import facility into an export facility.
This project, which aims to meet growing global LNG demand, will deliver three liquefaction trains and upgrade existing storage and dock facilities to enable the export of 16.45 metric tons per year of LNG. Moreover, it is subject to Lake Charles LNG's decision to issue a notice to proceed with the project.
This initiative marks a significant step in boosting global energy security while focusing on efficiency and clean operations. KBR’s extensive experience in LNG projects, along with its partnership with Technip Energies, positions KTJV to execute this large-scale conversion successfully. The final go-ahead will depend on securing commercial offtake commitments and third-party equity.
KBR’s Stock Performance
Shares of this company have underperformed the Zacks Engineering - R and D Services industry in the past three months. KBR engages in a highly competitive sector. Macroeconomic concerns like interest rate hikes, global recession fears and sector-specific headwinds could result in overall negative sentiment in the stock market, especially in industries tied to energy and infrastructure development.
Image Source: Zacks Investment Research
That said, new and on-contract growth across its businesses and increased demand for sustainable services and technology are likely to be beneficial in the upcoming period.
KBR’s Solid Backlog Raises Hope for the Future
KBR’s strong project momentum stems from its resilient business model and efficiency-driven initiatives. The increasing global emphasis on national security, energy security, energy transition, and climate change has provided significant tailwinds. With over five decades of design engineering expertise across industries, KBR remains a leader in decarbonization efforts, utilizing innovative processes and low-carbon technologies to effectively reduce emissions.
In the second quarter of 2024, KBR received $2.1 billion in bookings and options in highly strategic areas, with a trailing 12-month book-to-bill of 1x. Total revenues increased 6% to $1.86 billion year over year. The upside was backed by growth across Sustainable Technology Solutions (STS), as well as the Government Solutions’ (GS) new and on-contract growth across International, Defense & Intel, and Science and Space, partially offset by contraction in Readiness & Sustainment due to Ukraine funding delays.
As of June 28, 2024, the total backlog (including award options of $3.332 billion) was $20.1 billion compared with $21.73 billion at 2023-end. Of the total backlog, GS booked was $12.89 billion. The STS segment contributed $3.92 billion to the total backlog.
Backed by its solid performance in the first half and improving global demand for its services, KBR raised its adjusted earnings per share (EPS) projection to the range of $3.15-$3.30 from $3.10-$3.30 expected earlier.
The Zacks Consensus Estimate for KBR’s 2024 EPS has moved up by a cent to $3.25 in the past 30 days, which reflects 11.7% year-over-year growth on a 9.4% increase in revenues.
KBR’s Zacks Rank & Other Key Picks
Currently, KBR carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the same space are:
Sterling Infrastructure, Inc. (STRL - Free Report) presently sports a Zacks Rank #1 (Strong Buy). Sterling Infrastructure has a trailing four-quarter earnings surprise of 17.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for STRL’s 2024 sales and EPS indicates a rise of 9.7% and 26.6%, respectively, from the prior-year levels.
Howmet Aerospace Inc. (HWM - Free Report) presently carries a Zacks Rank #2. HWM has a trailing four-quarter earnings surprise of 10.9%, on average.
The Zacks Consensus Estimate for HWM’s 2024 sales and EPS indicates a rise of 12.6% and 40.8%, respectively, from the prior-year levels.
M-tron Industries, Inc. (MPTI - Free Report) currently carries a Zacks Rank #2. It has topped earnings estimates in three of the trailing four quarters and missed once, with an average surprise of 9.2%.
The Zacks Consensus Estimate for MPTI’s 2024 sales and EPS indicates a rise of 16.1% and 76.6%, respectively, from prior-year levels.