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KBR to Build European Missile Facility

Zacks Equity Research

KBR Inc. (KBR) recently won a contract from the U.S. Army Corps of Engineers, Europe District, to support the first land-based ballistic missile defense system of the continent at the Deveselu Air Base of Romania. The contract comes under the purview of the U.S. Department of Defense and is worth $134 million.

Spanning a 269-acre plot, the Deveselu Air Base was jointly selected by the United States and Romania for the Aegis Ashore Missile Defense System. The project will protect North Atlantic Treaty Organization (NATOF) European territories, including Romania. The Aegis Defense system will be the first land-based alternative of the Navy’s shipboard Aegis Air and Ballistic Missile Defense System.

The terms of the contract require KBR to move a four-storied radar deckhouse structure from the East Coast of the U.S. to Romania. According to the agreement, KBR will also construct various facilities and infrastructures such as roads, support buildings, communications, security and utilities. Notably, KBR will have to utilize its strong technical and project management capabilities to execute this challenging project.

Lately, KBR has won a number of contracts. The current deal is the second such contract received by KBR within a week. Earlier, the company procured a contract from TOTAL S.A. (TOT) – an integrated oil and gas company – to utilize its Residuum Oil Supercritical Extraction (ROSE) technology for the latter’s Antwerp refinery in Belgium.

KBR is one of the leading global engineering, construction and services companies, supporting energy, hydrocarbon, government services, minerals, civil infrastructure, power and industrial markets.

Currently, KBR carries a Zacks Rank #4 (Sell). Better-placed stocks in the same sector that are worth look include EMCOR Group Inc. (EME) and Chicago Bridge & Iron Company N.V. (CBI). Both of them have a Zacks Rank #1 (Strong Buy).

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