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In the last reported quarter, its adjusted earnings and revenues beat the Zacks Consensus Estimate by 10% and 1.1%, respectively. Also, on a year-over-year basis, the top and bottom lines grew 7% and 15%, respectively.
The company’s earnings surpassed the consensus estimate in each of the trailing four quarters, the average surprise being 5%.
Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter adjusted earnings has increased to 79 cents per share from 78 cents over the past seven days. The projected figure indicates a 6.8% increase from the year-ago quarter’s figure of 74 cents per share.
The consensus estimate for revenues is pegged at $1.89 billion, indicating growth of 7.5% from the prior-year quarter’s level.
Factors at Play
Revenues
The top line of KBR is expected to have gained in the to-be-reported quarter on the back of solid contributions from its Government Solutions (“GS”) and Sustainable Technology Solutions (“STS”) segments. The GS segment (which contributed 76.2% to first-quarter 2024 revenues) is likely to have gained due to the consistent wins of new and already existing contracts related to domestic and international operations, while growth in the STS segment (which contributed 23.8% to first-quarter revenues) is expected to have been driven by increased revenues from technology sales and engineering, and professional services.
Furthermore, the new and on-contract growth across International, Defense & Intel, and Science and Space in the GS segment and growth across the STS segment are likely to have aided the backlog level of KBR.
Although contraction in Readiness & Sustainment due to Ukraine funding delays is likely to have constrained the top line to some extent, the aforementioned tailwinds are likely to have more than offset this headwind during the quarter.
For the quarter, our model predicts the revenues from the GS and STS segments to increase 7.1% to $1.45 billion and 10.7% to $444 million, respectively, from the year-ago quarter.
Earnings & Margins
The bottom line of the company is expected to have fared well due to a decline in selling, general and administrative expenses, and leverage from increased revenues. Also, a favorable international and revenue mix and strong project execution, accompanied by an increased demand trend, are likely to have added to the uptrend. Moreover, these tailwinds are anticipated to have contributed to the expansion of the gross margin and adjusted EBITDA margin.
For the second quarter, we expect both the gross margin and adjusted EBITDA margin to expand 30 basis points on a year-over-year basis.
What Our Model Indicates
Our proven model conclusively predicts an earnings beat for KBR this time around. The company possesses the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: KBR has an Earnings ESP of +0.82%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Here are some other companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat in their second-quarter results.
Aspen Aerogels, Inc. (ASPN - Free Report) currently has an Earnings ESP of +23.53% and a Zacks Rank of 1.
ASPN’s earnings topped the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 68.2%. Earnings for the second quarter of 2024 are expected to increase a whopping 122.7% year over year.
EMCOR Group, Inc. (EME - Free Report) currently has an Earnings ESP of +4.76% and a Zacks Rank of 3.
EME’s earnings for the second quarter are expected to increase 24.8%. The company reported better-than-expected earnings in each of the last four quarters, the average surprise being 32%.
Dycom Industries, Inc. (DY - Free Report) currently has an Earnings ESP of +4.43% and a Zacks Rank of 2.
DY’s earnings for the second quarter are expected to increase 7.4%. The company reported better-than-expected earnings in three of the trailing four quarters and missed on the remaining occasion, the average surprise being 30.2%.
Image: Bigstock
KBR Gears Up to Post Q2 Earnings: Key Factors to Consider
KBR, Inc. (KBR - Free Report) is slated to report its second-quarter 2024 results on Jul 24, 2024, before market open.
In the last reported quarter, its adjusted earnings and revenues beat the Zacks Consensus Estimate by 10% and 1.1%, respectively. Also, on a year-over-year basis, the top and bottom lines grew 7% and 15%, respectively.
The company’s earnings surpassed the consensus estimate in each of the trailing four quarters, the average surprise being 5%.
Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter adjusted earnings has increased to 79 cents per share from 78 cents over the past seven days. The projected figure indicates a 6.8% increase from the year-ago quarter’s figure of 74 cents per share.
KBR, Inc. Price and EPS Surprise
KBR, Inc. price-eps-surprise | KBR, Inc. Quote
The consensus estimate for revenues is pegged at $1.89 billion, indicating growth of 7.5% from the prior-year quarter’s level.
Factors at Play
Revenues
The top line of KBR is expected to have gained in the to-be-reported quarter on the back of solid contributions from its Government Solutions (“GS”) and Sustainable Technology Solutions (“STS”) segments. The GS segment (which contributed 76.2% to first-quarter 2024 revenues) is likely to have gained due to the consistent wins of new and already existing contracts related to domestic and international operations, while growth in the STS segment (which contributed 23.8% to first-quarter revenues) is expected to have been driven by increased revenues from technology sales and engineering, and professional services.
Furthermore, the new and on-contract growth across International, Defense & Intel, and Science and Space in the GS segment and growth across the STS segment are likely to have aided the backlog level of KBR.
Although contraction in Readiness & Sustainment due to Ukraine funding delays is likely to have constrained the top line to some extent, the aforementioned tailwinds are likely to have more than offset this headwind during the quarter.
For the quarter, our model predicts the revenues from the GS and STS segments to increase 7.1% to $1.45 billion and 10.7% to $444 million, respectively, from the year-ago quarter.
Earnings & Margins
The bottom line of the company is expected to have fared well due to a decline in selling, general and administrative expenses, and leverage from increased revenues. Also, a favorable international and revenue mix and strong project execution, accompanied by an increased demand trend, are likely to have added to the uptrend. Moreover, these tailwinds are anticipated to have contributed to the expansion of the gross margin and adjusted EBITDA margin.
For the second quarter, we expect both the gross margin and adjusted EBITDA margin to expand 30 basis points on a year-over-year basis.
What Our Model Indicates
Our proven model conclusively predicts an earnings beat for KBR this time around. The company possesses the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: KBR has an Earnings ESP of +0.82%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks Poised to Beat on Earnings
Here are some other companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat in their second-quarter results.
Aspen Aerogels, Inc. (ASPN - Free Report) currently has an Earnings ESP of +23.53% and a Zacks Rank of 1.
ASPN’s earnings topped the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 68.2%. Earnings for the second quarter of 2024 are expected to increase a whopping 122.7% year over year.
EMCOR Group, Inc. (EME - Free Report) currently has an Earnings ESP of +4.76% and a Zacks Rank of 3.
EME’s earnings for the second quarter are expected to increase 24.8%. The company reported better-than-expected earnings in each of the last four quarters, the average surprise being 32%.
Dycom Industries, Inc. (DY - Free Report) currently has an Earnings ESP of +4.43% and a Zacks Rank of 2.
DY’s earnings for the second quarter are expected to increase 7.4%. The company reported better-than-expected earnings in three of the trailing four quarters and missed on the remaining occasion, the average surprise being 30.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.