) and three other firms recently received an $800-million
five-year contract from the U.S. Navy. The contract was awarded
under the Global Contingency Construction Multiple Award Contract
and its scope includes civilian construction contract capability
during any natural disaster. KBR and the other three firms are
required to provide humanitarian assistance and deal with
conflict situations or assist in projects of similar nature.
The project will be included in the company's Government,
Infrastructure and Power segment, which has a legacy of
contingency construction and support operations for the
Department of Defense and other Federal Agencies across the
world. This segment reported a 20% decline in revenues in the
latest reported quarter. However, it witnessed a rise in job
income from the North American Government and Logistics (NAGL)
and International Government, Defence and Support Services
As per the current contract, KBR and the other three firms
will be required to construct an airfield runway and/or repair,
pier and waterfront construction and repair, electrical power
plants and distribution systems, water treatment plants, bridges,
warehouse facilities, medical clinics and fencing.
Prior to this, in May 2013, KBR's joint venture with CH2M Hill
was awarded a contract worth $17.9 million under the Air Force
Contract Augmentation Program (AFCAP). According to the terms of
the agreement, the joint venture will be responsible for
operating and maintaining power plants at Al Udeid Air Base,
Qatar, for the U.S. Air Force.
Although KBR currently has a Zacks Rank #3 (Hold), we expect
the stock to experience an upward revision and show a rising
trend in the coming quarters backed by the favorable scenario.
Other stocks from the same sector that look promising include
Michael Baker Corporation
) with a Zacks Rank #1 (Strong Buy), while
AO Smith Corp
) carry a Zacks Rank #2 (Buy).
SMITH (AO) CORP (AOS): Free Stock Analysis
BAKER (MICHAEL) (BKR): Free Stock Analysis
KBR INC (KBR): Free Stock Analysis Report
VSE CORP (VSEC): Free Stock Analysis Report
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