Morningstar | Strong Momentum Continues for KBR
Under CEO Stuart Bradie, leading global engineering and construction firm KBR is emphasizing its differentiated government services as well as its broad technology and innovation offerings across the energy sector. It also seeks to de-emphasize a number of legacy issues related to past project work.KBR conducts its operations in three segments. Government services (70% of 2018 revenue and 65% of EBIT) serves governments globally with technical capabilities across defense, space, aviation, and other government programs and missions including research and development, systems engineering, test and evaluation, program management, operations, maintenance, and field logistics.Technology (6% revenue/14% EBIT) provides proprietary technology focused on the monetization of hydrocarbons (especially natural gas and natural gas liquids) in ethylene and petrochemicals, fertilizers, oil refining, gasification, and consulting. Hydrocarbon services (24% revenue/21% EBIT) supports onshore oil and gas, liquefied natural gas/gas to liquids, oil refining, petrochemicals, chemicals, differentiated engineering, procurement, and construction, maintenance services, and program management.KBR targets large, complex projects where competition is inherently limited. Its competitive strengths include its lengthy record, vertical integration, diversified project mix, and financial strength. It limits its vertical integration to complex projects where full-service offering cannot be easily provided by others. KBR's high-profile projects are diversified across geography and industry. Its $13.5 billion backlog includes chemical projects at the heart of the U.S. petrochemical renaissance, the single-largest LNG complex (Gorgon joint venture in Western Australia), and the largest single support services contract for the U.S. military (LOGCAP IV in Afghanistan).Should low energy prices persist, KBR may face rising competition, often at the expense of margins or risk. KBR will rely on its engineering expertise and technology portfolio in midstream and downstream energy, along with petrochemicals, plus other healthy niches to sustain market share and healthy profitability.KBR provides services and technologies across the asset and program life-cycle within the government services and hydrocarbons industries. The company has three segments: Government Solutions, which provides life-cycle support solutions to defense, space, aviation and other programs and missions for military and other government agencies; Technology Solutions, which combines technologies, equipment and catalyst supply, digital solutions and associated knowledge-based services into a global business for refining, petrochemicals, inorganic and specialty chemicals; and Energy Solutions, which provides life-cycle support solutions across the upstream, midstream and downstream hydrocarbons markets.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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