KBR Q2 profit beats on STS project ramp-up

Overview

• U.S. engineering solutions firm's Q2 revenue rose 2%, beating analyst expectations

• Adjusted EPS for Q2 increased 9%, beating analyst expectations

• Operating income fell 11% due to one-time spin-off costs

Outlook

• KBR reaffirms fiscal 2026 revenue guidance of $7.90 bln to $8.36 bln

• Company expects fiscal 2026 adjusted EBITDA of $980 mln to $1.04 bln

• KBR targets completion of Mission Technology Solutions spin-off on Jan 4, 2027

Result Drivers

• STS PROJECT RAMP-UP - Revenue growth in Sustainable Technology Solutions driven by continued execution of previously awarded work and ramp-up of new projects, especially in the Middle East and Latin America

• INTERNATIONAL GOVERNMENT CLIENTS - Growth in Mission Technology Solutions revenue from international government clients, particularly Australia and the UK, partially offset declines in U.S. federal work and EUCOM contingency runoff

• ONE-TIME SPIN-OFF COSTS - Operating income declined due to one-time spin-off costs and other charges related to the planned separation of the Mission Technology Solutions segment

Company press release: ID:nGNX3NQC8J

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the it services consulting peer group is "buy"

• Wall Street's median 12-month price target for KBR Inc is $42.50, about 18.3% above its July 29 closing price of $35.93

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

Reuters Recommended Reads

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)