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KBR Wins $70M Task Order to Help U.S. Army's STARE Project

·4 min read

KBR, Inc. KBR has won a $70-million, four-year Department of Defense Information Analysis Center task order to support the U.S. Army in maintaining current sensor readiness.

Per the contract, KBR will offer technical analysis for sensor development at the U.S. Army Program Executive Office Missiles and Space, Search, Track, Acquire, Radiate, Eliminate (STARE) Project Office. The sensor will address the current and future threats to the STARE office. KBR's experts will independently verify and validate sensor and system-of-systems performance within the Integrated Air and Missile Defense Battle Command System and future multi-domain operation architectures.

Byron Bright, president of KBR’s Government Solutions unit, said, "This contract is critical to maintain current sensor readiness, within the Army Fires portfolio, while modernizing sensors to address emerging threats and support future Army multi-domain operations."

Over the past four decades, KBR has been supporting the U.S. Army’s air and missile defense systems with a combination of its engineering, technical and scientific expertise as well as full life cycle capabilities, mission knowledge and future-focused technologies. Known for excelling in complex and extreme environments, KBR is trusted to overcome the nation's most pressing challenges.

KBR’s Robust Government Business to Aid Business

KBR is a leader in advancing air, space, cyber, and missile defense systems for the U.S. military. The company’s Government Solutions unit has been performing pretty well. The Government Solutions business has been banking on on-contract growth in logistics and engineering, take-away wins alongside new work awarded under the company’s portfolio of well-positioned contracting vehicles.

Strength in KBR’s overseas logistics and mission support programs on the back of higher military exercise activities, increased outsourcing of sustainment activities by the military, and the ramp-up of the new wins led to the growth. Further, higher tasking for various missile defense and other military priorities in its engineering business areas, under select IDIQ contracts, also led to the upside.

Currently, KBR is witnessing higher revenues in the segment, given solid organic growth across each of its government businesses, including new work supporting Operation Allies Welcome ("OAW") and the acquisition of Centauri in October 2020. Government Solutions generated revenues of $6.1 billion in 2021, reflecting a 52% increase from 2020 (36% organic). KBR expects non-recurring OAW work to be substantially completed in early 2022.

Government Solutions booked $12.63 billion of backlog at 2021-end, up from $12.66 billion at 2020-end.

Share Performance

KBR’s shares have gained 11.2% so far this year, outperforming the Zacks Engineering – R&D Services industry’s 0.5% rally. Its solid prospects are backed by continuous contract wins, strong project execution, backlog level, and potential government as well as technology businesses.

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Recently, KBR updated its 2025 long-term financial targets on the back of the HomeSafe alliance joint venture.

Zacks Rank & Key Picks

Currently, KBR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fluor Corporation FLR: Fluor — a Zacks Rank #1 company — is gaining from the "Building a Better Future" initiative, which is focused on enhancing markets outside the traditional oil and gas sector, fair and balanced commercial deals, financial discipline, and high-performing business culture. It made significant progress toward strategic goals that comprise the reduction of outstanding debt by 30% and identified ways for more than $150 million in annual cost savings.

Over the past 30 days, the Zacks Consensus Estimate for Fluor’s 2022 earnings has increased from $1.12 to $1.34 per share, indicating 42.6% year-over-year growth.

Sterling Construction Company, Inc. STRL: Sterling — a Zacks Rank #2 (Buy) company — has been benefiting from broad-based growth across the E-Infrastructure, Building and Transportation solutions segments.

The consensus mark for Sterling’s earnings for 2022 has increased to $2.86 from $2.63 per share over the past 30 days. The revised projection suggests 33% year-over-year growth.

AECOM ACM: AECOM — a Zacks Rank #2 company — is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets. ACM has been continuously focusing on delivering industry-leading margins and unlocking capital to promote growth as well as innovation. Also, focus on higher-margin and lower-risk Professional Services businesses bodes well.

Over the past 30 days, the consensus estimate for AECOM’s earnings for fiscal 2022 has increased from $3.35 to $3.40 per share, implying a 20.6% year-over-year improvement.


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