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KBR's Government Unit Acquires Australian Defense Contracts

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KBR, Inc.‘s (KBR - Free Report) Government Solutions Asia-Pacific (GS APAC) business has acquired more than 15 defense contracts from an Australian company, SMA.

With these defense contracts, KBR is well positioned to provide technical training services to the Royal Australian Navy (RAN). Notably, this highly strategic contract acquisition by KBR that covers a range of projects across Australia added more depth and strength to its business.

The company’s strength in technical services will support the RAN's commitment of upgrading its fleet across submarines, offshore patrol vessels and new frigates.

KBR’s Support to Department of Defence

KBR has been supporting various Australian government agencies as a 'Major Service Provider' over the past several years. Currently, it is engaged in the integrated soldier system support program for the Australian Army, sustainment of engineering services for the largest ships in the RAN, Mission IT solutions and support across the ADF, as well as workforce training for the Garrison Estate Management System project.

The recent acquisitions will support Australian Department of Defence’s investment in new military capabilities for the Australian Defence Force or ADF.

Contract Winning Spree & Solid GS Unit to Combat Economic Woes

The company’s Government Solutions or GS business — which contributed 69.6% to 2019 revenues — has been serving the U.S. Air Force, Army, Navy, Marine Corps, and other federal agencies and foreign allies over the past several years. The GS segment generated 9% organic growth in 2019.

KBR’s continued industry-leading organic revenue improvement was underpinned by on-contract growth in logistics and engineering, take-away wins, alongside new work awarded under the company’s portfolio of well-positioned contracting vehicles.

Particularly, the GS APAC segment generated double-digit organic growth in 2019 and won 28 contracts — a combination of new awards and extensions — in first-quarter 2020. Notably, this reflects its solid reputation for trusted service and delivery excellence.

Owing to solid performance across businesses, shares of KBR have outperformed the Zacks Engineering - R And D Services industry in a month’s time. Notably, the company is banking on strength of the Government Solutions business to optimize growth potential. Also, steady growth in backlog is adding to KBR’s bliss.

Zacks Rank

KBR — which shares space with Gates Industrial Corporation plc (GTES - Free Report) , Quanta Services, Inc. (PWR - Free Report) and AECOM (ACM - Free Report) in the same industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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