KBR (NYSE:KBR) Issues Quarterly Earnings Results

KBR (NYSE:KBR) announced its earnings results on Thursday. The construction company reported $0.99 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.90 by $0.09, FiscalAI reports. KBR had a net margin of 5.49% and a return on equity of 32.55%. The business had revenue of $1.98 billion for the quarter, compared to analyst estimates of $1.87 billion. During the same quarter last year, the business earned $0.91 earnings per share. The company’s revenue for the quarter was up 1.6% compared to the same quarter last year. KBR updated its FY 2026 guidance to 3.870-4.220 EPS.

Here are the key takeaways from KBR’s conference call:

• Strong first-half performance: Revenue rose 2% year over year to approximately $2.0 billion, adjusted EBITDA increased 7% to $258 million, and margins expanded to 13%. KBR reaffirmed its full-year revenue, EBITDA, EPS, and adjusted operating cash flow guidance.
• STS demand and visibility remain robust: Sustainable Technology Solutions posted 1.5x quarterly book-to-bill, record backlog of $5.5 billion—up 40% year over year—and a pipeline exceeding $6 billion. Management expects mid-teens full-year revenue growth, though quarterly margins may vary with project and procurement mix.
• MTS has substantial awarded and potential work: Approximately 94% of full-year MTS revenue guidance is under contract, with $1.6 billion of awarded programs currently under protest and roughly $10.4 billion awaiting award. Management said defense, space, modernization, and mission operations demand remains healthy.
• Planned separation remains on track: KBR continues targeting a January 4, 2027 spin-off, with IRS and SEC processes, systems separation, contract bifurcation, organizational design, and leadership appointments progressing. The MTS spin-off will be named Trinzic, with investor days planned for November.
• Cash flow and execution risks remain: First-half operating cash flow conversion was 74%, affected by delayed STS Middle East collections linked to regional conflict, although management characterized the issue as timing-related and maintained its full-year outlook. MTS awards under protest and the eventual wind-down of the Plaquemines project also create timing and replacement-work uncertainties.

KBR Trading Up 6.6%

Shares of KBR traded up $2.26 during midday trading on Friday, reaching $36.63. The company had a trading volume of 3,842,707 shares, compared to its average volume of 1,631,764. The firm has a 50 day simple moving average of $35.07 and a 200-day simple moving average of $37.43. The company has a quick ratio of 1.16, a current ratio of 1.15 and a debt-to-equity ratio of 1.52. The stock has a market cap of $4.64 billion, a PE ratio of 11.03, a price-to-earnings-growth ratio of 1.86 and a beta of 0.44. KBR has a 1-year low of $29.94 and a 1-year high of $52.23.

KBR Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Wednesday, July 15th. Shareholders of record on Monday, June 15th were paid a $0.165 dividend. The ex-dividend date of this dividend was Monday, June 15th. This represents a $0.66 dividend on an annualized basis and a dividend yield of 1.8%. KBR’s dividend payout ratio (DPR) is 19.88%.

Key Headlines Impacting KBR

Here are the key news stories impacting KBR this week:

• Positive Sentiment: KBR reported adjusted earnings per share of $0.99 and revenue of $1.98 billion, exceeding analyst expectations of $0.90 and $1.89 billion, respectively. Adjusted EBITDA rose 7% to $258 million, while net income increased 32% year over year. KBR Reports Second Quarter Fiscal 2026 Results
• Positive Sentiment: Sustainable Technology Solutions posted a record backlog of approximately $5.5 billion and a 1.5x book-to-bill ratio, supported by awards for ammonia, sustainable aviation fuel and e-fuels projects. Companywide backlog and options totaled $23.0 billion.
• Positive Sentiment: Management reaffirmed fiscal 2026 revenue guidance of roughly $7.9 billion to $8.36 billion and adjusted EPS guidance of $3.87 to $4.22, signaling confidence despite a mixed operating environment.
• Positive Sentiment: The planned separation of Mission Technology Solutions remains on track for January 4, 2027. KBR also introduced the planned independent company’s name, Trinzic, along with its branding. KBR Unveils Trinzic
• Positive Sentiment: Citigroup maintained a “buy” rating while lowering its price target modestly from $50 to $49, still implying substantial potential upside. Two reported insider purchases over the past six months also provide a supportive signal.
• Neutral Sentiment: Analyst and institutional positioning remains mixed: several large investors added KBR shares, while others—including Franklin Resources, Morgan Stanley and Boston Partners—reduced holdings.
• Negative Sentiment: Investors noted margin pressure in parts of the business, with the quarter’s consolidated net margin at 5.21%. The lower end of the EPS outlook is also below the current consensus estimate of approximately $3.97.

Insider Activity

In other news, Director Thaer Lewis Von bought 3,000 shares of the firm’s stock in a transaction on Thursday, May 14th. The shares were bought at an average cost of $30.77 per share, for a total transaction of $92,310.00. Following the acquisition, the director directly owned 10,358 shares of the company’s stock, valued at $318,715.66. This trade represents a 40.77% increase in their position. The acquisition was disclosed in a document filed with the SEC, which is available at the SEC website. Also, CFO Shad E. Evans acquired 8,375 shares of the stock in a transaction that occurred on Wednesday, May 13th. The stock was acquired at an average price of $30.60 per share, with a total value of $256,275.00. Following the completion of the transaction, the chief financial officer directly owned 43,725 shares of the company’s stock, valued at $1,337,985. This trade represents a 23.69% increase in their position. The SEC filing for this purchase provides additional information. Insiders purchased 29,875 shares of company stock valued at $945,160 over the last three months. 1.15% of the stock is currently owned by company insiders.

Institutional Trading of KBR

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the company. Kestra Advisory Services LLC purchased a new position in shares of KBR in the 4th quarter valued at approximately $83,000. Parkside Financial Bank & Trust raised its stake in shares of KBR by 56.0% during the fourth quarter. Parkside Financial Bank & Trust now owns 2,098 shares of the construction company’s stock worth $84,000 after purchasing an additional 753 shares during the last quarter. Northwestern Mutual Wealth Management Co. lifted its holdings in shares of KBR by 95.2% during the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 3,047 shares of the construction company’s stock worth $122,000 after purchasing an additional 1,486 shares during the period. Sender Co & Partners Inc. acquired a new stake in shares of KBR during the third quarter worth $204,000. Finally, Voleon Capital Management LP acquired a new position in KBR in the 3rd quarter valued at $227,000. Hedge funds and other institutional investors own 97.02% of the company’s stock.

Analyst Upgrades and Downgrades

Several research firms recently issued reports on KBR. Wells Fargo & Company lowered their price objective on KBR from $45.00 to $40.00 and set an “equal weight” rating on the stock in a report on Monday, April 13th. Citigroup lowered their price target on KBR from $50.00 to $49.00 and set a “buy” rating on the stock in a research note on Friday. Zacks Research upgraded KBR from a “strong sell” rating to a “hold” rating in a research report on Friday, April 10th. Weiss Ratings restated a “sell (d+)” rating on shares of KBR in a report on Wednesday, June 24th. Finally, UBS Group lowered their target price on shares of KBR from $42.00 to $36.00 and set a “neutral” rating on the stock in a research note on Thursday, May 21st. Three investment analysts have rated the stock with a Buy rating, four have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the company currently has a consensus rating of “Hold” and a consensus price target of $45.83.

About KBR

KBR, Inc is a global engineering, procurement, construction and services (EPC&S) company headquartered in Houston, Texas. The firm delivers integrated solutions and technologies across the full project lifecycle for customers in the energy, government, industrial and infrastructure sectors. Its offerings span feasibility studies, front-end engineering design, detailed design, procurement, fabrication, construction, commissioning and operations support.

The company is organized into business segments that include Energy Solutions, which focuses on oil and gas processing, liquefied natural gas (LNG) facilities and petrochemical plants; Government Solutions, providing logistics, sustainment, training and mission support for defense, intelligence and civilian agencies; and Sustainable Technology, delivering chemical process technologies, water treatment and lower-carbon fuels expertise.