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Investing.com - KBR, Inc. (NYSE:KBR) on Thursday reported third-quarter adjusted earnings that exceeded analyst expectations, sending shares up 3.3% as the company delivered double-digit profit growth despite flat revenue.
The engineering and technology firm posted adjusted earnings per share of $1.02 for the third quarter, beating the analyst consensus of $0.96.
While revenue remained essentially flat at $1.93 billion compared to the same period last year, falling short of the $1.98 billion consensus estimate, KBR’s adjusted EBITDA rose 10% to $240 million with an improved margin of 12.4%.
"Despite revenue headwinds, KBR achieved year on year double digit Adjusted EBITDA growth, strong cash conversion and maintained operational momentum with a strong book to bill," said Stuart Bradie, Chairman, President & CEO.
"Our diverse portfolio, prudent cost management and focus on value-add for our customers delivered enhanced margins in line with our strategy."
The company reported strong bookings of $4.2 billion with a book-to-bill ratio of 1.4x, indicating robust future business. However, KBR revised its full-year revenue guidance downward to $7.75-7.85 billion from its previous outlook of $7.9-8.1 billion, citing slower award pace and unresolved bid protests during the U.S. government shutdown.
KBR maintained its full-year adjusted earnings guidance of $3.78-3.88 per share, in line with analyst expectations of $3.85.
The company’s Sustainable Technology Solutions segment showed particularly strong performance with a 23.4% adjusted EBITDA margin, up from 20.5% in the prior year, driven by strong project execution on an LNG project.
Operating cash flows from continuing operations for the quarter were $198 million, up 29% from the previous year, with operating cash conversion of 152% due to improvements in days sales outstanding in both business segments.
KBR also announced its intention to spin off its Mission Technology Solutions segment into a separate publicly-traded company, targeting completion by mid-to-late 2026.
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