KBR, Inc (KBR - Free Report) has secured a contract from Haifa Chemicals Ltd to modify a nitric acid plant in Mishor-Rotem, Israel. Haifa Chemicals’ nitric acid plant is being revamped to meet the stricter environmental regulations.
Per the contract, a wholly-owned subsidiary of KBR — Weatherly, Inc — will design, supply and commission a complete system for the Selective Catalytic Reduction (“SCR”) of nitrogen oxides along with additional catalyst beds for N2O and NH3 slip abatement.
The SCR system will be combined into two existing plants, previously designed by KBR Weatherly.
Notably, the company has secured a number of contracts of late. KBR’s backlog level of $13.2 billion (as of Mar 31, 2018) indicates its underlying strength. The company is optimistic about backlog growth in the early 2018 on the back of several opportunities.
Recent Contracts Gained
Meanwhile, recently, KBR secured a contract from GS Caltex Corp to supply its proprietary Selective Cracking Optimum Recovery (SCORE) Ethylene Technology. The company will supply the advanced SCORE technology license and basic engineering design services for GS Caltex’s 700 KTA ethylene mixed feed cracker. GS Caltex, a company owned by GS Energy and U.S.-based Chevron Corp., will build the new plant and use naphtha, liquefied petroleum gas and refinery off-gases as primary feedstocks. The project, to be built in the South Korean southern city of Yeosu, will use KBR's highly selective SC-1 furnaces for higher yield and flexibility.
In June, KBR secured a contract from DuPont Safety & Construction — a business unit of DowDuPont Specialty Products Division — to expand the production capacity of Tyvek non-woven materials. Estimated revenues associated with this contract will be booked into the backlog of unfilled orders for KBR's Hydrocarbons Services Business Segment in the second half of 2018.
These contracts are expected to substantially boost revenues for KBR. The Zacks Consensus Estimate for current-year revenues is pegged at $4.8 billion, indicating a rise of 15.3% year over year.
Over the past year, KBR’s shares have gained 18.1% against the industry’s average decline of 4%. Going forward, KBR expects broad-based growth in all the segments which is expected to reflect in the price performance. Primary growth drivers include high end and differentiated government services work, strong margin performance as well as technology and consulting.
Zacks Rank & Stocks to Consider
KBR carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same sector are Installed Building Products, Inc (IBP - Free Report) , PGT, Inc (PGTI - Free Report) and Aegion Corporation (AEGN - Free Report) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Installed Building Products, PGT and Aegion have a long-term earnings growth rate of 30%, 19.3% and 12.5%, respectively.
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