UK markets close in 6 hours 14 minutes
  • FTSE 100

    -63.02 (-0.82%)
  • FTSE 250

    -196.77 (-1.06%)
  • AIM

    -3.32 (-0.45%)

    +0.0002 (+0.02%)

    -0.0024 (-0.19%)
  • Bitcoin GBP

    -403.34 (-1.85%)
  • CMC Crypto 200

    -9.46 (-1.67%)
  • S&P 500

    -9.94 (-0.23%)
  • DOW

    -106.56 (-0.31%)

    +0.36 (+0.40%)

    -3.80 (-0.20%)
  • NIKKEI 225

    +276.21 (+0.85%)

    -328.16 (-1.82%)
  • DAX

    -140.29 (-0.90%)
  • CAC 40

    -61.58 (-0.86%)

KBR Stock Rises on Q4 Earnings Beat, Solid Backlog Level

KBR, Inc. KBR reported mixed fourth-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Shares of the company gained 2.91% following the earnings release on Feb 16.

The increasing global importance of national security, energy security, energy transition and climate change have been acting as major tailwinds for KBR.

Stuart Bradie, KBR’s president and CEO, said, “We believe we are primed to continue driving growth and stakeholder value, with ever-growing confidence in our 2025 targets, and we are pleased to announce our fiscal 2023 earnings and cash guidance."

KBR, Inc. Price, Consensus and EPS Surprise

KBR, Inc. Price, Consensus and EPS Surprise
KBR, Inc. Price, Consensus and EPS Surprise

KBR, Inc. price-consensus-eps-surprise-chart | KBR, Inc. Quote

Inside the Headline Numbers

Adjusted earnings of 69 cents per share surpassed the consensus estimate of 58 cents by 19% but decreased from 71 cents reported a year ago. That said, the adjusted earnings increased 60%, excluding Operation Allies Welcome (OAW).

Total revenues decreased 11.8% year over year to $1.61 billion and missed the consensus mark of $1.65 billion by 2.7%. Revenues increased 23%, excluding OAW.

The downside was mainly due to the completion of work related to the Operations Allies Welcome program in early 2022 that commenced in third-quarter 2021.

Adjusted EBITDA decreased 8.7% year over year to $157 million in the quarter. Adjusted EBITDA margin expanded to 10% from 7% a year ago, driven by a strong performance of the Sustainable Technology Solutions business, acquisitions and solid project execution.

Segmental & Backlog Details

Revenues in the Government Solutions (GS) segment decreased 42.9% year over year to $1,256 million. Although GS continues to benefit from strong appropriations for government spending in all the markets served, the unit experienced some outlays drag, particularly in the United States. Also, foreign exchange had an adverse impact on revenues.

Sustainable Technology Solutions' (STS) revenues increased 17.3% year over year to $352 million. STS benefited from strong end markets, superior technology offerings and highly sought-after engineering solutions.

As of Dec 31, 2022, the total backlog (including award options) was $19.76 billion compared with $19.71 billion at the 2021-end. Of the total backlog, Government Solutions booked $11.54 billion. The Sustainable Technology Solutions segment accounted for $4.01 billion of the total backlog.

At 2022-end, the company delivered a book-to-bill of 1.2X on a trailing 12-month basis and recorded $1.5 billion of awards and options in the fourth quarter and $8.2 billion in 2022.

2022 Highlights

Adjusted earnings came in at $2.71 per share, up 11.5% from $2.43 a year ago. Adjusted earnings were up 28% after excluding OAW. The upside was led by higher operating income, partially offset by higher interest expenses.

Adjusted EBITDA increased 7% to $668 million in 2021. Adjusted EBITDA margin expanded 166 basis points to 10% from 2021.

Liquidity & Cash Flow

As of Dec 31, 2022, KBR’s cash and cash equivalents were $389 million, up from $370 million at 2021-end. Long-term debt was $1,376 million at 2022-end, down from $1,875 million at 2021-end.

In 2022, cash provided by operating activities totaled $396 million, up from $278 million in the year-ago period. In 2022, it had an adjusted free cash flow that increased to $353 million from $289 million a year ago.

2023 Guidance

KBR expects total revenues in the range of $6.9-$7.1 billion and an adjusted EBITDA between $715 and $745 million. Also, it expects an effective tax rate between 24% and 25% and adjusted earnings per share in the band of $2.76-$2.96. Adjusted operating cash flow is projected in the range of $425-$460 million.

Zacks Rank & Recent Construction Releases

KBR currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Martin Marietta Materials, Inc. MLM reported mixed results for fourth-quarter 2022. Earnings beat the Zacks Consensus Estimate but revenues (products and services) missed the same. On a year-over-year basis, the metrics declined due to inclement weather in a number of key markets and higher operating costs.

Looking forward, Ward Nye, chairman and CEO of MLM, said, “In total, we expect full year 2023 aggregates shipments to be relatively flat but, given the carryover effects of our 2022 commercial actions and broad acceptance of our January 1, 2023 price increases, we are confident in our ability to continue to deliver accelerated margin expansion.”

AECOM ACM reported better-than-expected results for first-quarter fiscal 2023, where earnings and revenues surpassed the Zacks Consensus Estimate. Post the results, shares of the technical and management support services provider slipped 0.01% on Feb 6.

On a year-over-year basis, ACM’s bottom line declined despite top-line growth. The company’s strong top-line performance was backed by strong organic NSR growth.

Weyerhaeuser Company WY reported fourth-quarter 2022 results, wherein its earnings beat the Zacks Consensus Estimate, and the same declined from the year-ago period's levels. The quarter’s performance reflects strong execution across the businesses, which was offset by macroeconomic headwinds, supply-chain disruptions and dynamic market conditions.

On an impressive note, WY unveiled a 90 cents per share supplemental dividend. The company also increased its base dividend by 5.9%, repurchased $550 million in shares and refinanced $900 million of debt.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Weyerhaeuser Company (WY) : Free Stock Analysis Report

AECOM (ACM) : Free Stock Analysis Report

KBR, Inc. (KBR) : Free Stock Analysis Report

Martin Marietta Materials, Inc. (MLM) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research