KBR, BIV Builders Form JV to Strengthen Foothold in Malaysia
In a bid to fortify its foothold in South East Asia, professional services and technologies provider, KBR, Inc. KBR inked an agreement with BIV Builders to establish a standalone long-term joint venture, KBIV, based in Kuala Lumpur, Malaysia.
Combining KBR’s professional services and project delivery expertise with BIV Builders’ cost competitive and experienced resources, this joint venture will deliver state-of-the-art engineering, project delivery and asset program management solutions. This joint venture will allow KBR to be close to partners and customers and seize upon selective regional opportunities from field development planning to project delivery.
The joint venture will also get access to KBR's subsidiary, Granherne, to help it service the full spectrum of hydrocarbons life-cycle projects in Malaysia. Forming this joint venture highlights KBR’s keen strategic alliances to bolster its inorganic growth and expanding market share. During the fourth quarter of 2016, KBR’s subsidiary, Brown & Root Industrial Services, LLC acquired the MEI Group, LLC, a provider of turnaround, specialty, and construction related services.
KBR’s shares have lost 3.8% over the last three months. However, this compares favorably with the Zacks categorized Engineering/R&D Services industry’s decline of 12%. Most players in this sector have been battling unfavorable economic conditions like volatility in the oil and gas markets and spending cuts, which continue to harm their profitability.
In particular, KBR has been suffering execution issues in certain major projects, which have hurt the company’s performance in recent times. Huge cash outflows to fund losses on the EPC projects also pose concerns for this Zacks Rank #3 (Hold) company.
Stocks to Consider
Better-ranked stocks in the industry include TopBuild Corp. BLD, Lennar Corporation LEN and EMCOR Group, Inc. EME. While TopBuild sports a Zacks Rank #1 (Strong Buy), Lennar and EMCOR carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TopBuild has a positive average earnings surprise of 6.0% for the last four quarters, having beaten estimates thrice.
Lennar has a stellar earnings surprise history with an average positive surprise of 8.7%, beating estimates all through.
EMCOR Group has a decent earnings beat history, having surpassed estimates thrice over the trailing four quarters. It has an average positive surprise of 15.4% over the same time frame.
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