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KBR Wins EPC Contract From ExxonMobil to Expand Refinery

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KBR, Inc. (KBR - Free Report) received a contract from ExxonMobil to deliver engineering, procurement and construction (“EPC”) services in order to enable the latter to move forward with its crude expansion project in Beaumont, TX. The deal is entitled to support refinery expansion of the offsite and interconnecting units. However, financial terms of the deal are not yet disclosed by the company.

KBR has been executing such projects safely and efficiently on the U.S. Gulf Coast over the past several years. In fact, it has successfully executed some of the world's largest and most technically complex projects. The recent deal will allow Hydrocarbons Services business to generate higher revenues.

Over the past few quarters, the company has been posting solid top-line numbers, backed by strong organic growth in Government Services and Technology businesses, accretive growth from Aspire and SGT, along with buoyant government contracting and hydrocarbons end-market results.

The company’s consulting business is experiencing increased activity, on the back of more efficient reutilization and strong pricing environment. In fact, KBR believes that it will notice strong Brownfield opportunities (especially in the consulting sector in the upstream area), largely attributable to rising commodity prices and underlying global demand.

Additionally, the company foresees decent opportunities in the downstream petrochemical and ethylene projects, along with various emerging small-scale LNG projects in North America that are expected to boost the segment’s overall performance. KBR anticipates persistent growth in the segment, with margins likely to come in the mid-20s in the near future.

Its contract winning spree underscores KBR's solid ability to safely and efficiently deliver projects in operating facilities. Notably, shares of the company have increased 19.5% in the past year, outperforming S&P 500’s growth of 0.6%.

KBR, Inc. Price

Zacks Rank & Stocks to Consider

Currently, KBR carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the Zacks Construction sector include Altair Engineering Inc. (ALTR - Free Report) , Jacobs Engineering Group Inc. (JEC - Free Report) and Comfort Systems USA, Inc. (FIX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Altair Engineering, Jacobs and Comfort Systems’ earnings for the current year are expected to increase 23.1%, 13.4% and 10%, respectively.

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