KBR Secures Ammonia Contract For HURL Project In India

KBR, Inc. (NYSE:KBR) secured an ammonia plant contract with Toyo Engineering Corporation (TOYO) for the Hindustan Urvarak and Rasayan Ltd (HURL) greenfield urea project situated in Gorakhpur, India. The company will deliver licensing and basic engineering design services under the contract.

HURL is a joint venture of three of the most influential public sector companies in India —Coal India Limited, NTPC Limited and Indian Oil Corporation Limited. The Gorakhpur-based plant targets national self-sufficiency in urea production for India.

KBR is an established leader in ammonia technology. Earlier this month, KBR clinched a contract from PT Panca Amara Utama to offer Ammonia InSite Technology to PAU's new ammonia plant complex located at Sulawesi, Indonesia. The company also won a new contract in January to provide its premium patented catalyst and equipment, technology licensing and basic engineering design services for the new ammonia plant of Indorama, located at the Port Harcourt site of Nigeria.

KBR’s other segments are witnessing good momentum as well. Last week, the company’s Government Services business clinched a $34.1-million task order from the U.S. Air Force. KBRwyle also secured a $69.3-million indefinite-delivery/indefinite-quantity contract from the Naval Air Warfare Center Aircraft Division to offer engineering and technical services for the installation and maintenance of the Light Airborne Multipurpose System MK III Datalink.

KBR’s Government Services business is expanding steadily, driven by organic growth and expansion of task orders on existing U.S. Government contracts. Growth on existing program management projects in the U.K is also supplementing revenue growth.

Further, this Zacks Rank #3 (Hold) company is optimistic about growth across key markets like the United States, the U.K. and Australia, driven by consistent opportunities across the lifecycle of projects. In the past year, the stock has returned 7.5% against the industry’s decline of 10.4%.

KBR’s consulting business has also experienced impressive growth in recent quarters, driven by increased activity and higher oil prices, which is a good indicator for prospects in future engineering and construction project.

Despite these positives, lower revenues from the Engineering and Construction segments have been a pressing concern for the company. Also, volatility in the oil and gas markets with oversupply might strain prices as well as spending levels, which might hurt the company’s projects and orders.

Stocks to Consider

Some better-ranked stocks from the same space are Fluor Corporation (NYSE:FLR) , Willdan Group, Inc. (NASDAQ:WLDN) and Jacobs Engineering Group Inc. (NYSE:JEC) . While Fluor sports a Zacks Rank #1 (Strong Buy), Willdan Group and Jacobs Engineering Group carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fluor has surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 8.4%.

Willdan Group has outpaced estimates in each of the preceding four quarters, with an average earnings surprise of 45.4%.

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

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