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KBR's Government Services Unit Wins Naval BOSS Contract

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KBR, Inc.’s (KBR - Free Report) global government services business, KBRwyle, won two contracts from Naval Facilities Engineering Command to provide base operating support services (“BOSS”) in Europe, Africa and Southwest Asia.

Per the deal, KBRwyle will support military persons with facility management, galley services and base vehicle maintenance along with laundry services, pest control and fire emergency services. The contract is valued at approximately $54 million.

Extensive Focus on Winning Contracts — Major Growth Driver

KBRwyle, a leading base operations support provider, continues its contract wins spree with the addition of two BOSS contracts to its list.

On Nov 29, KBRwyle received a cost-plus-award-fee task order in Naval Support Facility, Poland for $23.5 million. The period of performance is one year base period, with three option years.

Additionally, KBRwyle won a $30-million contract modification in the Kingdom of Bahrain. The contract was previously awarded in June 2014. The current modification is the fourth option year, with total contract value of $147 million.

These moves underscore KBR’s efforts to earn high-end and differentiated government services work. KBRwyle has been serving U.S. and Allied military forces along with diplomatic and civilian personnel deployed around the world.

KBR’s Government Services Unit: A Bright Spot

The company’s government services segment, accounting for more than 72.6% of the total revenues, has been performing pretty well. Presently, KBR is optimizing its growth potential on the back of its government services business.

As of Sep 30, 2018, KBR’s total backlog came in at $13.5 billion, representing about 81.8% work in the government services segment. The segment’s backlog increased 34.9% on a year-over-year basis in the said period. Notably, the company’s total revenues increased 23.6% year over year, courtesy of 59.5% growth of the government services business.

Shares of KBR have broadly outperformed the industry in the past six months. Its shares have gained 0.6% against the industry’s decline of 3.6% in the same period, owing to ongoing contract wins, acquisition of SGT, consolidation of acquired entities in the Aspire Defense program and robust organic growth.

Zacks Rank & Other Stocks to Consider

KBR currently sports a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the Construction sector are Great Lakes Dredge & Dock Corporation (GLDD - Free Report) , Altair Engineering Inc. (ALTR - Free Report) , and EMCOR Group, Inc. (EME - Free Report) . While Great Lakes currently sports a Zacks Rank #1 (Strong Buy), Altair Engineering and EMCOR carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Great Lakes’ earnings in 2018 are expected to increase 111%.

Altair Engineering has an expected earnings growth rate of 23.1% for the current year.

EMCOR has a projected earnings growth rate of 20% for the current year.

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