Back to top

Image: Bigstock

KBR Wins Engineering Deal for Petrobras' Atapu & Sepia Fields

Read MoreHide Full Article

KBR, Inc. (KBR - Free Report) has been chosen by the Seatrium Group to develop topsides facilities for two floating production storage and offloading (FPSO) units for Petrobras' Atapu and Sepia fields in the Santos Basin, Brazil.

These new high-production, energy-efficient units — P-84 and P-85 — are part of Petrobras' latest generation of FPSO platforms, designed for high production capacity and energy efficiency. Each FPSO will be able to produce 225,000 barrels of oil per day and handle 10 Mm³ of gas daily, in line with Petrobras' all-electric concept. The design incorporates advanced technologies to minimize environmental impact, such as zero routine flaring, CO2 capture, and variable speed drives.

KBR’s Sustainable Technology Solutions’ experts will provide detailed engineering and procurement support, enhancing the platforms' operational efficiency and sustainability.

Solid Contract Winning Spree

KBR’s focus on a resilient business model and efficiency-boosting initiatives have sparked its project-winning momentum. Also, the rising global importance of national security, energy security, energy transition and climate change has been acting as a major tailwind. Notably, KBR has more than five decades of comprehensive design engineering experience in various industries.

KBR remains at the forefront of pioneering decarbonization initiatives through continuous process innovation and harnessing low-carbon technologies to reduce emissions effectively.

This year, KBR is celebrating 100 years of offering clean fuel solutions.

KBR's Share Price Performance

Shares of this company have gained 5.2% in the past three months compared with the Zacks Engineering - R and D Services industry’s 2.9% growth. The ongoing contract wins are likely to boost its prospects in the forthcoming quarters.

Zacks Investment Research
Image Source: Zacks Investment Research

In the second quarter of 2024, KBR received $2.1 billion in bookings and options in highly strategic areas, with a trailing 12-month book-to-bill of 1x. Total revenues increased 6% to $1.86 billion year over year. The upside was backed by growth across Sustainable Technology Solutions as well as the Government Solutions’ new and on-contract growth across International, Defense & Intel, and Science and Space, partially offset by contraction in Readiness & Sustainment due to Ukraine funding delays.

As of June 28, 2024, the total backlog (including award options of $3.332 billion) was $20.1 billion compared with $21.73 billion at 2023-end. Of the total backlog, Government Solutions booked was $12.89 billion. The Sustainable Technology Solutions segment contributed $3.92 billion to the total backlog.

Backed by its solid performance in the first half and improving global demand for its services, KBR raised its adjusted earnings per share (EPS) projection to the range of $3.15-$3.30 from $3.10-$3.30 expected earlier.

KBR’s EPS estimate for 2024 reflects 11.3% year-over-year growth to $3.24 on a 9% increase in revenues.

KBR’s Zacks Rank & Key Picks

Currently, KBR carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same space are:

Howmet Aerospace Inc. (HWM - Free Report) presently sports a Zacks Rank #1 (Strong Buy). HWM has a trailing four-quarter earnings surprise of 10.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for HWM’s 2024 sales and EPS indicates a rise of 12.6% and 39.1%, respectively, from the prior-year levels.

Sterling Infrastructure, Inc. (STRL - Free Report) presently sports a Zacks Rank #1. Sterling Infrastructure has a trailing four-quarter earnings surprise of 17.4%, on average.

The Zacks Consensus Estimate for STRL’s 2024 sales and EPS indicates a rise of 9.7% and 26.6%, respectively, from the prior-year levels.

Quanta Services Inc. (PWR - Free Report) presently carries a Zacks Rank #2 (Buy). PWR has a trailing four-quarter earnings surprise of 4.6%, on average.

The Zacks Consensus Estimate for PWR’s 2024 sales and EPS indicates a rise of 14.2% and 18.3%, respectively, from the prior-year levels.

Published in