KBR Q3 Earnings Beat Estimates, Lifts FY21 Outlook

KBR, Inc. KBR reported third-quarter revenue growth of 34% year-over-year to $1.843 billion, +20% on an organic basis, beating the consensus of $1.54 billion.
Adjusted EPS improved to $0.64 compared to $0.44 in 3Q20, beating the consensus of $0.57.
The gross margin contracted by 200 bps to 10.5%. The operating income increased to $101 million (+8.6% Y/Y), and the margin contracted by 126 bps to 5.5%.
Adjusted EBITDA was $162 million (+29.6% Y/Y), and margin contracted by 27 bps to 8.8%.
KBR generated adjusted cash from operating activities year-to-date of $287 million, compared to $268 million a year ago, and Adjusted Free cash flow of $265 million; adjusted free cash flow conversion was 110% year-to-date.
At the end of the quarter, the company's backlog was $14.76 billion, down from $15.12 billion as of December 31, 2020. Total backlog and options totaled $19.93 billion.
The company repurchased $25 million of common shares during the quarter and issued a quarterly dividend of $0.11 per share, up 10% from 2020 levels.
FY21 Outlook: KBR expects Consolidated revenue of $7.2 billion - $7.5 billion (prior expectation of $5.8 billion - $6.2 billion), above the consensus of $6.07 billion. Adjusted EBITDA margin of 8% (prior 9%).
It expects GAAP EPS of $0.05 - $0.15 (prior $(0.10) - $0.10); and adjusted EPS of $2.30 - $2.40 (prior $2.00 - $2.20), above the consensus of $2.18.
Price Action: KBR shares are trading lower by 0.54% at $42 during the premarket session on Thursday.

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