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KBR Receives Lihuayi Contract for Olefins Plant in China

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KBR Inc. (KBR - Free Report) received a contract from Lihuayi Lijin Refining & Chemical Co., Ltd. for new olefins production business in Dongying, China.

Per the deal, KBR will provide Lihuayi with its proprietary Catalytic Olefins Technology (“K-COT”) and Selective Cracking Optimum Recovery (“SCORE”) Technology. Its K-COT technology converts low-value olefinic, paraffinic or mixed streams into high-value propylene and ethylene. Along with its SCORE technology, K-COT helps users to maximize feed and product flexibility.

Earlier to this contract, Lihuayi has also implemented KBR's phenol technology in Dongying. Lihuayi is one of the innovative downstream chemical companies and it develops petrochemicals in a green and energy-efficient way.

KBR has also been providing olefin plant design, construction and technology development efficiently for more than 50 years.

Contract Wins Continue to Bolster Share Price

Notably, shares of KBR have broadly outperformed the industry in a year. Its shares have gained 15.6% compared with the industry’s growth of 2.3% in the said period, owing to ongoing contract wins, acquisition of SGT, consolidation of acquired entities in the Aspire Defense program and robust organic growth.

The contract with Lihuayi reflects KBR’s ability to cash in on big projects for driving incremental revenues. KBR’s backlog level of $13.5 billion (as of Jun 30, 2018) highlights underlying strength.

Recently, KBR’s government services business, KBRwyle, has been selected as one of 15 prime contractors on the $28-billion Department of Defense (DoD) Information Analysis Center Multiple Award Contract (“IAC MAC”).

Notably, during the second quarter, KBR won some prestigious awards for its Government Services and Hydrocarbons Services segment. These include a $133-million task order by the U.S. Army to provide technical and engineering services to the PATRIOT missile system, and $900-million IDIQ contract for providing solutions under the Department of Defense's Joint Test and Evaluation Program. Under Hydrocarbon Services, KBR received a multi-year contract to provide engineering, procurement and construction management services to a fortune 100 chemicals manufacturer in the United States and Mexico.

Zacks Rank & Other Stocks to Consider

KBR currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the Zacks Construction sector include Comfort Systems USA, Inc. (FIX - Free Report) , Gates Industrial Corporation plc (GTES - Free Report) and Jacobs Engineering Group Inc. (JEC - Free Report) . While Comfort Systems and Gates Industrial sport a Zacks Rank #1, Jacobs carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comfort Systems’ earnings surpassed the consensus estimate in three out of the trailing four quarters, delivering an average positive surprise of 11.2%.

Gates Industrial’s 2018 earnings are expected to increase 42.2%.

Jacobs surpassed earnings estimates in each of the trailing four quarters, resulting in an average positive surprise of 15.4%.

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