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KBR's Services for DuPont Facilities

Zacks Equity Research

Leading construction major KBR Inc (KBR) has won a five-year extension contract to construct and maintain DuPont’s (DD) production facilities across the Northeast U.S. and gulf coast regions. KBR will book the deal in the backlog of third quarter 2013, but other financial details of the deal were not revealed.

The scope of the contract requires KBR to expand its existing services from 17 sites to 26 sites for the DuPont facilities. KBR excels in providing continuous and cost effective services while maintaining the optimum levels for safety and productivity.

Previously, KBR had received a three year Master Services Contract for providing EPCM services to DuPont and also a contract for DuPont’s Tedlar production facility in Circleville, Ohio. This contract was for providing the core services such as construction management and engineering designs.

KBR is an industrial construction and engineering facility provider, offering services to hydrocarbon, chemical and petrochemical industries. KBR has a 60 year old legacy in providing construction and maintenance services. Going forward, as the demand for construction and maintenance services continues to grow, we expect the company to secure more contracts.

In the last reported quarter, KBR reported earnings of 61 cents per share, beating the Zacks Consensus Estimate of 57 cents. However, earnings were down 12.8% from the prior-year tally of 70 cents due to nonrecurring charges related to office closure and severance costs. Revenues came in at $2.0 billion compared with $2.1 billion in the second quarter of 2012.

KBR currently holds a Zacks Rank #3 (Hold). Some  players in similar industry and worth a look are Michael Baker Corp. (BKR), which holds a Zacks Rank #1 (Strong Buy) and VSE Corp (VSEC), having a Zacks Rank #2 (Buy).

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