KBR, Inc. KBR secured a U.S. CENTCOM Support contract from the Air Force Contract Augmentation Program (AFCAP V) to provide mission-critical labor. The contract has a ceiling value of $69 million and a two-year base period with an eight-month option.
Per the cost-plus contract, KBR is assigned to provide support personnel at three locations in the U.S. CENTCOM area of operations, including Ali Al Salem Air Base, Kuwait; Prince Sultan Air Base, Saudi Arabia and Al Dhafra Air Base, UAE, over the next two and a half years. The role involves assisting and guiding local and foreign nationals at U.S. military facilities across these three bases, potentially reducing deployment cycles for other critical missions.
The company's deployment processing center, designed for surge support, has efficiently processed over 88,000 individuals for 150 contracts/task orders at 70 global locations over the past two decades. This contract represents a strategic expansion of KBR's portfolio in the CENTCOM area of operations, complementing the company's existing base operations support in Bahrain, the United Arab Emirates and Saudi Arabia.
Contract Wins: A Boost for the Backlog
Shares of the company rose 31.9% in the past six months, outperforming the industry’s 19.7% gain. The trend is likely to continue, given the solid backlog level (including award options).
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As of Mar 31, 2023, the total backlog (including award options) of KBR was $20.89 billion compared with $19.76 billion at 2021-end. In first-quarter 2023, KBR received $3.1 billion in bookings and options in highly strategic areas, with a trailing 12-month book-to-bill of 1.4x.
In first-quarter 2023, the Science & Space division under the Government Solutions or GS, segment rose 10.3% to $279 million. Of the total backlog, GS booked $16 billion.
Overall, KBR’s long-term, mission-critical programs provide strong visibility in volatile times. The company’s overseas logistics and mission support programs on the back of higher military exercise activities, increased outsourcing of sustainment activities by the military and the ramp up of the new wins led to its growth. Its determination to reduce emissions, product diversification, inorganic moves and strategic alliances bode well.
Zacks Rank & Key Picks
KBR currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Zacks Construction sector are:
Dycom Industries, Inc. DY carries a Zacks Rank #1 (Strong Buy). DY has a trailing four-quarter earnings surprise of 153.7%, on average. Shares of DY have gained 11% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DY’s 2024 sales and EPS indicates a rise of 8.3% and 41%, respectively, from the year-ago period’s levels.
Martin Marietta Materials, Inc. MLM carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 31%, on average. Shares of MLM have increased 40.4% in the past year.
The Zacks Consensus Estimate for MLM’s 2023 sales and EPS indicates a rise of 18.7% and 32.3%, respectively, from the year-ago period’s levels.
Vulcan Materials Company VMC carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 7.1%, on average. Shares of VMC have increased 42.4% in the past year.
The Zacks Consensus Estimate for VMC’s 2023 sales and EPS indicates a rise of 6% and 26.8%, respectively, from the year-ago period’s levels.
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