KBR Wins Two Ammonia Plant Contracts For HURL Project In India

KBR, Inc. (NYSE:KBR) announced that it has secured two ammonia plant contracts from Toyo Engineering Corporation for the supply of an Operator Training Simulator (OTS) and an Advanced Process Control (APC) system. The OTS and APC system will be used in the new single-stream 2200 MTPD ammonia plant, built for the Hindustan Urvarak and Rasayan Ltd (“HURL”), situated in Gorakhpur, U.P., India.

Per the contract, KBR will deliver technology licensing as well as basic engineering design for the project. Also, it will provide turnkey OTS and APC systems and associated services for the HURL-G project. Notably, the work, which will be performed by KBR's Advanced Automations teams under its Technology Solutions segment, is likely to be completed within three years.

Notably, 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. This Gorakhpur-based plant targets national self-sufficiency in urea production for India.

Other Notable Contract Wins

Recently, the company announced its integration with PLINKE Hydrochloric Acid Purification technologies from Italmatch Deutschland GmbH for its phosphorous acid production plant in Frankfurt, Germany.

Also, during the third-quarter 2019, the company received a Purifier license and basic engineering design contract for the largest grassroots ammonia plant designed by KBR that primarily featured energy efficiency, flexibility and lower capital costs. We believe that the company’s Technology Solutions segment will continue to benefit from contract wins, which will drive the company’s top line in upcoming quarters as well. Notably, the segment’s revenues increased 18.5% year over year in the third quarter of 2019.

For the Technology Solutions segment, this Zacks Rank #3 (Hold) company expects thriving global technology opportunities — led by ammonia, refining and olefins projects — to persist. The Technology Solutions segment recorded 48%, 29% and 19% organic growth in the first, the second and the third quarter of 2019, respectively. The results were primarily backed by strong execution across its chemical, petrochemical, refining and ammonia projects as well as higher proprietary equipment sales.

Following robust contribution from the company’s businesses, shares of KBR have surged 96.6% so far this year compared with the industry’s 25.3% rally.

Key Picks

Some better-ranked stocks in the same space are Gates Industrial Corporation plc (NYSE:GTES) , Quanta Services, Inc (NYSE:PWR) and AECOM (NYSE:ACM) . Gates and Quanta Services sport a Zack Rank #1 (Strong Buy), while AECOM carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gates’ earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average being 12.1%.

Quanta Services’ has three-five year expected earnings growth rate of approximately 15%.

AECOM has three-five year expected earnings growth rate of 12.4%.

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