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KBR Q3 Earnings Top but Revenues Miss Estimates, '24 Guidance Up
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KBR, Inc. (KBR - Free Report) reported mixed third-quarter fiscal 2024 results, with adjusted earnings surpassing the Zacks Consensus Estimate while revenues missed the same. The top and bottom lines increased on a year-over-year basis.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The quarter’s results were driven by the benefits realized from the LinQuest acquisition and solid contributions from both the reportable businesses, given the increased demand trends for its services. Although high costs and expenses were a trouble, leverage from the increased top line aided the uptick in the quarter.
Driven by the robust performance in its core business, KBR raised its 2024 outlook across key metrics.
However, KBR stock experienced a 4.5% decline during the trading session on Wednesday, following the earnings release.
Inside KBR’s Headlines
Adjusted earnings per share (EPS) of 84 cents topped the Zacks Consensus Estimate of 83 cents by 1.2% and grew 12% year over year.
Total revenues of $1.95 billion missed the consensus mark of $1.97 billion by 1.3% but rose 10% year over year. The upside was predominantly driven by $41 million in revenues associated with the LinQuest acquisition, along with growth in high-end defense engineering, classified intelligence, readiness and sustainment, and international programs within its Government Solutions (GS) business and increased revenues from technology sales, as well as engineering and professional services in its Sustainable Technology Solutions (STS) business.
Adjusted EBITDA increased 17.7% year over year to $219 million, with adjusted EBITDA margin expanding 70 basis points to 11.2%. Our model expected adjusted EBITDA to grow 16.9% year over year to $217.5 million with an adjusted EBITDA margin of 11.2%.
KBR’s Segmental & Backlog Details
Revenues in the Government Solutions or GS segment increased 11% year over year to $1.49 billion. Our model predicted the segment’s revenues to grow 8.6%.
The GS segment’s adjusted EBITDA was $152 million, up from $133 million in the prior-year quarter. Operating income increased 14% year over year to $123 million.
Revenues in the Sustainable Technology Solutions or STS segment rose 8% year over year to $457 million. Our model predicted the segment’s revenues to 14.6% to $487.2 million.
The STS segment’s adjusted EBITDA increased to $98 million from $89 million a year ago. Operating income increased 13% year over year to $95 million.
As of Sept. 27, 2024, the total backlog (including award options of $4.215 billion) was $22.12 billion compared with $21.73 billion at 2023-end. Of the total backlog, Government Solutions contributed $18.4 billion and the Sustainable Technology Solutions segment contributed $3.8 billion.
At the end of the fiscal third quarter, the company delivered a trailing 12-month book-to-bill of 1.1x.
Liquidity & Cash Flow of KBR
As of Sept. 27, 2024, KBR’s cash and cash equivalents were $462 million, up from $304 million at 2023-end. Long-term debt was $2.56 billion at the quarter end, up from $1.8 million at 2023-end.
In the first nine months of 2024, cash provided by operating activities totaled $422 million, up from $248 million in the year-ago period. It had an adjusted free cash flow of $368 million during the same period, up from $320 million a year ago.
KBR’s Updated Fiscal 2024 Guidance
KBR now expects total revenues to be in the band of $7.5-$7.7 billion (compared with the prior expected range of $7.4-$7.7 billion). It anticipates adjusted EBITDA to be between $840 million and $870 million (compared with the prior expected range of $825-$850 million).
Adjusted EPS is now projected to be in the band of $3.20-$3.30 (compared with the prior guided range of $3.15- $3.30). Operating cash flow is still expected to be in the range of $460-$480 million.
PulteGroup Inc. (PHM - Free Report) reported impressive results in the third quarter of 2024, wherein earnings and total revenues handily beat the Zacks Consensus Estimate and grew year over year.
The quarter’s result reflects the successful execution of the company’s balanced spec and build-to-order operating model. This, alongside the structural shortage of homes from years of underbuilding, continued to favor PHM. Thanks to such tailwinds, the home closings during the quarter grew year over year resulting in record third-quarter home sale revenues. PHM invested about $1.4 billion into its business during the quarter, while returning more than $360 million to its shareholders and generating a return on equity of 27% over the past 12 months.
NVR, Inc. (NVR - Free Report) reported mixed third-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and Homebuilding revenues surpassing the same. On the other hand, both metrics increased on a year-over-year basis.
This upside was backed by improved demand trends, which resulted in higher settlements. Although the cancellation rate increased in the quarter, growth in new orders is encouraging for the company. New orders increased 19% from the prior-year quarter’s level to 5,650 units. The ASP of new orders decreased 1% from the prior-year quarter’s figure to $450,700.
RPM International Inc. (RPM - Free Report) reported impressive earnings in first-quarter fiscal 2025 (ended Aug. 31, 2024), which beat the Zacks Consensus Estimate by 4.6% and increased 12.2% year over year. Yet, net sales missed the consensus mark by 2.4% and declined 2.1% from the previous year.
This specialty chemicals manufacturer reported strong earnings on the back of record adjusted EBIT for the 11th consecutive quarter and reduced interest expenses. The bottom line improved on the continued implementation of MAP 2025 operational improvement initiatives and leveraging its portfolio of products, services and entrepreneurial culture to capture growth opportunities. However, unfavorable foreign exchange and volume declines at Consumer Group and SPG units marred the top line.
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KBR Q3 Earnings Top but Revenues Miss Estimates, '24 Guidance Up
KBR, Inc. (KBR - Free Report) reported mixed third-quarter fiscal 2024 results, with adjusted earnings surpassing the Zacks Consensus Estimate while revenues missed the same. The top and bottom lines increased on a year-over-year basis.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The quarter’s results were driven by the benefits realized from the LinQuest acquisition and solid contributions from both the reportable businesses, given the increased demand trends for its services. Although high costs and expenses were a trouble, leverage from the increased top line aided the uptick in the quarter.
Driven by the robust performance in its core business, KBR raised its 2024 outlook across key metrics.
However, KBR stock experienced a 4.5% decline during the trading session on Wednesday, following the earnings release.
Inside KBR’s Headlines
Adjusted earnings per share (EPS) of 84 cents topped the Zacks Consensus Estimate of 83 cents by 1.2% and grew 12% year over year.
KBR, Inc. Price, Consensus and EPS Surprise
KBR, Inc. price-consensus-eps-surprise-chart | KBR, Inc. Quote
Total revenues of $1.95 billion missed the consensus mark of $1.97 billion by 1.3% but rose 10% year over year. The upside was predominantly driven by $41 million in revenues associated with the LinQuest acquisition, along with growth in high-end defense engineering, classified intelligence, readiness and sustainment, and international programs within its Government Solutions (GS) business and increased revenues from technology sales, as well as engineering and professional services in its Sustainable Technology Solutions (STS) business.
Adjusted EBITDA increased 17.7% year over year to $219 million, with adjusted EBITDA margin expanding 70 basis points to 11.2%. Our model expected adjusted EBITDA to grow 16.9% year over year to $217.5 million with an adjusted EBITDA margin of 11.2%.
KBR’s Segmental & Backlog Details
Revenues in the Government Solutions or GS segment increased 11% year over year to $1.49 billion. Our model predicted the segment’s revenues to grow 8.6%.
The GS segment’s adjusted EBITDA was $152 million, up from $133 million in the prior-year quarter. Operating income increased 14% year over year to $123 million.
Revenues in the Sustainable Technology Solutions or STS segment rose 8% year over year to $457 million. Our model predicted the segment’s revenues to 14.6% to $487.2 million.
The STS segment’s adjusted EBITDA increased to $98 million from $89 million a year ago. Operating income increased 13% year over year to $95 million.
As of Sept. 27, 2024, the total backlog (including award options of $4.215 billion) was $22.12 billion compared with $21.73 billion at 2023-end. Of the total backlog, Government Solutions contributed $18.4 billion and the Sustainable Technology Solutions segment contributed $3.8 billion.
At the end of the fiscal third quarter, the company delivered a trailing 12-month book-to-bill of 1.1x.
Liquidity & Cash Flow of KBR
As of Sept. 27, 2024, KBR’s cash and cash equivalents were $462 million, up from $304 million at 2023-end. Long-term debt was $2.56 billion at the quarter end, up from $1.8 million at 2023-end.
In the first nine months of 2024, cash provided by operating activities totaled $422 million, up from $248 million in the year-ago period. It had an adjusted free cash flow of $368 million during the same period, up from $320 million a year ago.
KBR’s Updated Fiscal 2024 Guidance
KBR now expects total revenues to be in the band of $7.5-$7.7 billion (compared with the prior expected range of $7.4-$7.7 billion). It anticipates adjusted EBITDA to be between $840 million and $870 million (compared with the prior expected range of $825-$850 million).
Adjusted EPS is now projected to be in the band of $3.20-$3.30 (compared with the prior guided range of $3.15- $3.30). Operating cash flow is still expected to be in the range of $460-$480 million.
KBR’s Zacks Rank & Recent Construction Releases
KBR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PulteGroup Inc. (PHM - Free Report) reported impressive results in the third quarter of 2024, wherein earnings and total revenues handily beat the Zacks Consensus Estimate and grew year over year.
The quarter’s result reflects the successful execution of the company’s balanced spec and build-to-order operating model. This, alongside the structural shortage of homes from years of underbuilding, continued to favor PHM. Thanks to such tailwinds, the home closings during the quarter grew year over year resulting in record third-quarter home sale revenues. PHM invested about $1.4 billion into its business during the quarter, while returning more than $360 million to its shareholders and generating a return on equity of 27% over the past 12 months.
NVR, Inc. (NVR - Free Report) reported mixed third-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and Homebuilding revenues surpassing the same. On the other hand, both metrics increased on a year-over-year basis.
This upside was backed by improved demand trends, which resulted in higher settlements. Although the cancellation rate increased in the quarter, growth in new orders is encouraging for the company. New orders increased 19% from the prior-year quarter’s level to 5,650 units. The ASP of new orders decreased 1% from the prior-year quarter’s figure to $450,700.
RPM International Inc. (RPM - Free Report) reported impressive earnings in first-quarter fiscal 2025 (ended Aug. 31, 2024), which beat the Zacks Consensus Estimate by 4.6% and increased 12.2% year over year. Yet, net sales missed the consensus mark by 2.4% and declined 2.1% from the previous year.
This specialty chemicals manufacturer reported strong earnings on the back of record adjusted EBIT for the 11th consecutive quarter and reduced interest expenses. The bottom line improved on the continued implementation of MAP 2025 operational improvement initiatives and leveraging its portfolio of products, services and entrepreneurial culture to capture growth opportunities. However, unfavorable foreign exchange and volume declines at Consumer Group and SPG units marred the top line.