KBR's KBRwyle Unit Secures Seat on $28B Defense Contract

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KBR Inc. 's KBR government services business, KBRwyle has been selected as one of 15 prime contractors on the $28-billion Department of Defense (DoD) Information Analysis Center Multiple Award Contract ("IAC MAC").

This indefinite-delivery, indefinite-quantity ("IDIQ") contract spans for nine years, under which KBRwyle is entitled to provide its research, development, test and evaluation expertise per the U.S. defense needs. KBRwyle can also exercise the option to bid on task orders focused on a wide breadth of technical areas, including weapons systems, military sensing, cybersecurity, C4ISR, sustainment and systems engineering, autonomous systems, modeling and simulation, biometrics, as well as critical infrastructure protection.

KBRwyle has been serving the defense department through various predecessor DoD IAC contracts since 2005. The most recent comprises the Defense Systems Technical Area Task, Cyber Security and Information Systems Technical Area Task, and Homeland Defense and Security Technical Area Task Contracts. Being one of DoD IAC's leading IAC prime contractors, KBRwyle has effectively provided more than $3 billion in solutions to a variety of DoD clients.

KBR, Inc. Price

KBR, Inc. Price | KBR, Inc. Quote

Government Services - A Major Top-Line Generator

The company's Government Services segment, accounting for more than 68% of its total revenues, has been performing pretty well. Presently, the company is banking on the strength of Government Services businesses to optimize its growth potential. The particular business is growing steadily, adding to KBR's bliss.

Notably, during the second quarter of 2018, the company's total revenues increased 16% year over year, courtesy of 11% organic growth of the Government Services business. Ongoing growth in KBR's overseas logistics and mission support programs with higher military exercise activities, increased outsourcing of sustainment activities by the military, along with the ramp up of new wins led to the growth. Moreover, higher tasking for various missile defense and other military priorities in its engineering business areas, under select IDIQ contracts, led to the upside.

Furthermore, KBR expects growth across all its key markets in the United States, U.K. and Australia, driven by continued opportunities across the lifecycle of projects.

Zacks Rank & Other Stocks to Consider

KBR currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the Zacks Construction sector include Comfort Systems USA, Inc. FIX , Gates Industrial Corporation plc GTES and Jacobs Engineering Group Inc. JEC . While Comfort Systems and Gates Industrial sport a Zacks Rank #1, Jacobs carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Comfort Systems, Gates Industrial and Jacobs' earnings are expected to grow 56.3%, 42.2% and 35.2%, respectively, this year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: FIX , JEC , KBR , GTES

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