Back to top

Image: Bigstock

KBR's Shares Increase 1.7% on Q4 Earnings & Revenue Beat

Read MoreHide Full Article

KBR, Inc. KBR reported strong results in fourth-quarter 2019. The top and bottom lines beat the Zacks Consensus Estimate and improved year over year on continued solid organic growth across the business. Following the results, the company’s shares increased 1.7% on Feb 20.

Adjusted earnings came in at 46 cents per share, beating the Zacks Consensus Estimate of 45 cents by 2.2%. The reported figure also increased 12.2% from 41 cents per share in the year-ago quarter.

Moreover, total revenues of $1.45 billion increased 9.2% year over year on the back of robust performance of each of its businesses. The top line also surpassed the consensus mark of $1.39 billion by 4.4%.

Adjusted EBITDA rose 7.3% year over year to $117 million in the quarter, backed by favorable close-out of a lump sum project in the non-strategic Business.

KBR, Inc. Price, Consensus and EPS Surprise

KBR, Inc. Price, Consensus and EPS Surprise

KBR, Inc. price-consensus-eps-surprise-chart | KBR, Inc. Quote

2019 Highlights

Adjusted earnings of $1.69 per share increased 10.5% from the 2018 level. Total revenues were $5.64 billion, reflecting an increase of 15% from a year ago, owing to double-digit growth in all operating segments. Adjusted EBITDA advanced 14% in the year.

Full-Year Segmental Details

Revenues in the Government Solutions segment grew 14% year over year to $3.93 billion. The upside can be attributed to the commencement of new programs, including holistic human and psychological performance services for the U.S. Special Operations Forces under the Preservation of the Force and Family program; networking, communications and training services for the U.K. Ministry of Defence; and launch range operations services at NASA's Wallops Flight Facility.

Technology Solutions' revenues increased 26% year over year to $374 million. The improvement can be attributed to strong execution across its chemical, petrochemical, refining and ammonia projects. Also, higher proprietary equipment sales contributed to the upside.

Energy Solutions' revenues increased 16% year over year to $1.34 billion. The uptick was backed by the ramp up of cost-reimbursable projects, including a brownfield revamp refinery project in the U.S. Gulf Coast, a crude terminal expansion project in the Permian Basin and a greenfield
methanol project in Louisiana.

Backlog

As of Dec 31, 2019, total backlog came in at $14.64 billion compared with $13.5 billion at 2018-end. Of the total backlog, Government Solutions booked $10.96 billion. Technology Solutions and the Energy Solutions segment accounted for $579 million and $3.1 billion of the total backlog, respectively.

Book-to-bill in 2019 was 1.3x, excluding the impact of its private finance initiatives or PFIs and foreign exchange.

Liquidity & Cash Flow

As of Dec 31, 2019, KBR’s cash and equivalents were $712 million, down from $739 million at the end of 2018.

At the end of 2019, operating cash flow totaled $256 million compared with $165 million in the year-ago period.

2020 Guidance

KBR expects adjusted earnings per share in the band of $1.80-$1.92. The Zacks Consensus Estimate for 2020 earnings is currently pegged at $1.90. Operating cash flows are projected in the range of $200-$250 million, implying 90-110% net income conversion. KBR recently approved a 25% increase in quarterly dividend and restored share repurchase authorization of $350 million.

Zacks Rank & Peer Release

KBR — which shares space with AECOM ACM and Quanta Services, Inc. PWR in the Zacks Engineering - R and D Services industry —  currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Jacobs Engineering Group Inc. J reported first-quarter fiscal 2020 (ended Dec 27, 2019) results, wherein earnings met the Zacks Consensus Estimate, while revenues beat the same. The company reaffirmed its adjusted EBITDA guidance for fiscal 2020.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.  

Click here for the 6 trades >>