KBR Secures Ammonia InSite Technology Contract In Indonesia

KBR, Inc. (NYSE:KBR) recently clinched a contract from PT Panca Amara Utama (PAU) to offer Ammonia InSite Technology to PAU's new ammonia plant complex located at Sulawesi, Indonesia. The revenues related to the project were booked into KBR’s Technology & Consulting Business segment’s backlog of unfilled orders in fourth-quarter 2017.

Per the deal, KBR will provide its proprietary technology, Ammonia InSite, to support the start-up and the commissioning of PAU's ammonia plant complex, which will later support sustained plant operations, maximizing asset utilization as well as profitability. The deal marks the addition of a new innovative KBR technology at the ammonia plant, which currently uses Reforming Exchanger System and Purifier Technology.

Ammonia InSite technology is an integrated solution which facilitates maximization of operational performance and profitability of ammonia plants. The technology performs through five modules that specialize in production management, energy efficiency, maintenance, reliability as well as environmental compliance. Notably, the solution consists of benchmarking, performance diagnostics and analytics, outcomes predictability as well as unplanned downtime prevention.

Our Take

KBR expects growth across all its key markets in the United States, UK and Australia, driven by continued opportunities across the lifecycle of projects. The company also expects steady growth for its Technology & Consulting segment. Its strong prospect pipeline in the downstream market, particularly in the United States and the Middle East, presents a good opportunity for further growth in upcoming quarters. In addition, growing client-operational expenditure is set to benefit the Engineering and Construction segment.

Over the past year, this Zacks Rank #3 (Hold) company’s shares have returned 5%, as against the industry’s decline of 12.3%. The company is banking on the strength and momentum of its Government Services businesses to optimize growth potential.

Moreover, the company intends to bolster its growth and expand market share through acquisition of companies or assets. In this context, some of the notable acquisitions made by the company in recent times are Honeywell Technology Solutions and Wyle. This apart, in fourth-quarter 2016, KBR’s subsidiary, Brown & Root Industrial Services acquired the MEI Group, LLC, a provider of turnaround, specialty and construction-related services.

Stocks to Consider

Some better-ranked stocks from the same space include Louisiana-Pacific Corporation (NYSE:LPX) , Dycom Industries, Inc. (NYSE:DY) and Jacobs Engineering Group Inc. (NYSE:JEC) . While Louisiana-Pacific sports a Zacks Rank #1 (Strong Buy), both Dycom Industries and Jacobs Engineering Group carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Louisiana-Pacific has surpassed estimates twice in the trailing four quarters, with an average positive earnings surprise of 5.2%.

Dycom Industries has outpaced estimates in the preceding four quarters, with an average earnings surprise of 7.1%.

Jacobs Engineering Group has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 11.4%.

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