KBR to Post Lackluster Earnings in Q4: Factors to Consider
KBR, Inc. KBR is scheduled to report fourth-quarter 2022 results on Feb 16, before the opening bell.
In the last reported quarter, the company’s adjusted earnings surpassed the Zacks Consensus Estimate by 3.2% and increased 1.6% year over year. However, revenues lagged the same by 0.8% and decreased 11.8% year over year.
KBR surpassed earnings estimates in the trailing 19 quarters.
How are Estimates Faring?
The Zacks Consensus Estimate for the quarter to be reported is pegged at 58 cents per share, unchanged over the past 60 days. This reflects a fall of 15.9% from the year-ago earnings of 69 cents per share. Revenues are expected to be $1.65 billion, down 33.9% year over year.
KBR, Inc. Price and EPS Surprise
KBR, Inc. price-eps-surprise | KBR, Inc. Quote
Factors at Play
KBR’s fourth-quarter 2022 performance is likely to have been affected by lower Government Solutions (GS) unit awards and uncertainty in the global market.
Although GS benefits from strong appropriations for government spending in all of the markets served, the unit has been experiencing some outlay drag, particularly in the United States. Foreign exchange remains another headwind for the business.
The Zacks Consensus Estimate for the GS segment’s net revenues is pegged at $1,329 million, indicating a decrease from $2,199 million reported a year ago.
The company’s Sustainable Technology Solutions' (STS) business has been leading the process technology development, commercialization and plant design solutions industries. Its best-in-class technologies have been used to design and build end-to-end, sophisticated digitization solutions and services for clients worldwide. STS has been driving growth by focusing on lowering carbon emissions, product diversification, energy efficiency, and more sustainable technologies and solutions. These factors are likely to have offset the negative impacts of the GS business to some extent.
The Zacks Consensus Estimate for the STS segment’s net revenues is pegged at $318 million, indicating a rise from the year-ago quarter’s reported figure of $300 million.
KBR’s unwavering focus and superb business execution, a solid contract-winning spree, strong project execution, and potential government and technology businesses are expected to have helped the company grow backlogs. The consensus estimate for the total backlog is pegged at $15,560 million, indicating a rise from $14,973 million reported a year ago.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for KBR in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat, which is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The company has an Earnings ESP of 0.00%.
Zacks Rank: It currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stock With Favorable Combinations
Here is a company in the same industry that, according to our model, have the right combination of elements to beat on earnings this time around.
Fluor Corporation FLR has an Earnings ESP of +2.48% and a Zacks Rank #2.
FLR’s earnings topped the consensus mark in one of the last four quarters but missed on three occasions, the average negative surprise being 38.2%. For the to-be-reported quarter, the Zacks Consensus Estimate is pegged at 54 cents, which indicates 74.2% year-over-year growth.
Recent Peer Releases
Jacobs Engineering Group Inc. J reported first-quarter fiscal 2023 (ended Dec 30, 2022) results, with earnings and revenues surpassing the Zacks Consensus Estimate and rising year over year.
The results reflect Jacobs’ ability to capture high growth opportunities emerging across Climate Response, Data Solutions, and Consulting & Advisory.
AECOM ACM reported better-than-expected results for first-quarter fiscal 2023, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
On a year-over-year basis, the bottom line declined despite top-line growth. AECOM’s strong top-line performance was backed by strong organic NSR growth.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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