KBR (KBR) Up 0.1% Since Last Earnings Report: Can It Continue?

Core Viewpoint - KBR Inc. reported mixed Q2 2024 results, with earnings exceeding estimates while revenues fell short, indicating a strong performance in core business areas and an optimistic outlook for the remainder of the year [2][3]. Financial Performance - Adjusted EPS was 83 cents, surpassing the consensus estimate of 79 cents by 5.1% and reflecting a 12% year-over-year increase [3]. - Total revenues reached $1.86 billion, missing the consensus mark of $1.88 billion by 1.6%, but showing a 6% increase year-over-year [3]. - Adjusted EBITDA rose 13% year-over-year to $216 million, with an adjusted EBITDA margin of 11.6%, up 75 basis points [3]. Segment Performance - Government Solutions segment revenues increased 3.3% year-over-year to $1.4 billion, with adjusted EBITDA of $145 million, slightly up from $143 million, but the adjusted EBITDA margin fell 20 basis points to 10.4% [4]. - Sustainable Technology Solutions segment revenues grew 14.2% year-over-year to $458 million, with adjusted EBITDA increasing 22.5% to $98 million and an adjusted EBITDA margin of 21.4%, up 150 basis points [4]. Backlog and Liquidity - Total backlog as of June 28, 2024, was $20.1 billion, down from $21.73 billion at the end of 2023, with Government Solutions contributing $12.89 billion and Sustainable Technology Solutions adding $3.92 billion [5]. - Cash and cash equivalents increased to $414 million from $304 million at the end of 2023, while long-term debt rose to $1.9 million from $1.8 million [6]. Cash Flow and Guidance - Cash provided by operating activities in the first half of 2024 totaled $261 million, down from $288 million in the previous year, with adjusted free cash flow at $226 million, down from $250 million [7]. - Updated guidance for 2024 includes total revenues projected between $7.4 billion and $7.7 billion, adjusted EBITDA between $825 million and $850 million, and adjusted EPS in the range of $3.15 to $3.30 [8]. Market Sentiment - Estimates for KBR have trended downward over the past month, indicating a potential shift in market sentiment [9]. - KBR holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [11].