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KBR Wins Pre-FEED Contract for INPEX LNG Project in Indonesia

Zacks

KBR Inc. KBR recently secured a pre-FEED contract from INPEX Corporation’s subsidiary, INPEX Masela Ltd. The company will provide pre-FEED services, including site master plan development and scope of work for the FEED phase for the Abadi onshore LNG Project in the Arafura sea, Indonesia.

Per the deal, KBR will offer cost-effective pre-FEED services for the LNG Project, which are expected to be in operation from the company’s Jakarta office in Indonesia. KBR is likely to complete the work within six months’ time frame.

Other Notable Contracts

Of late, KBR secured a number of significant deals, which include a contract modification from the U.S. Marine Corps, a license and engineering (“LBED”) contract from ENAP Refinerías SA and an ammonia plant contract for the Hindustan Urvarak and Rasayan Ltd (HURL) greenfield urea project in India.


Existing Business Scenario

KBR expects growth across all its key markets in the United States, the UK and Australia, driven by continued opportunities across the lifecycle of projects. Selective opportunities in downstream petrochemical and ethylene projects, and growing number of small-scale LNG projects in North America are expected to boost its hydrocarbons services business’ growth. In a year’s time, this Zacks Rank #2 (Buy) company’s shares have gained 10.3% against the industry’s decline of 8%.

Moreover, an increasing portfolio of smaller and OpEx-facing projects, services, program management, and maintenance contracts offer the company a stronger foundation compared with previous years. Per KBR, healthy balance between hydrocarbons and government projects positions it well for future growth. Further, the company’s high backlog level indicates underlying strength. Notably, KBR remains optimistic about backlog growth in 2018 owing to the pipeline of opportunities.

The company’s aims to bolster its growth and expand market share through acquisition of companies or assets is encouraging. In this context, some of the recent acquisitions made by KBR include the SGT and the Aspire acquisitions. According to the company, the prospects of both these buyouts are impressive, mainly on account of increased government spending across space and defense.

This apart, in 2016, KBR completed the buyout of Honeywell Technology Solutions. This, in turn, has fortified its position as a government services organization by unlocking prospects of new services in the aerospace logistics and intelligence domain.

Other Stocks to Consider

Some other top-ranked stocks in the same space include Quanta Services, Inc. PWR, Jacobs Engineering Group Inc. JEC and AECOM ACM. All these three companies carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Quanta Services surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 6.7%.

Jacobs Engineering Group outpaced estimates in the preceding four quarters, with an average earnings surprise of 12.3%.

AECOM outpaced estimates thrice in the preceding four quarters, with an average earnings surprise of 2.7%.

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