KBR first-quarter profit up, shares climb
HOUSTON (Reuters) - KBR Inc (KBR.N), the engineering and construction company, said on Friday its first-quarter net profit more than tripled, helped by an arbitration award, income from energy projects and its work for the U.S. government in Iraq.
Adjusting for items, analysts said KBR earned about 40 cents per share, above the Wall Street consensus estimate of 34 cents per share.
Shares of the company, which split off from parent Halliburton Co (HAL.N) last year, shot up 7 percent in morning trading on the New York Stock Exchange.
Research firm Simmons & Co Int'l told its clients in a research note that it was a good quarter for the Houston company, and Tudor Pickering Holt Securities said the results offered investors a "sigh of relief" after a big miss from one of KBR's competitors.
Net profit increased to $98 million, or 58 cents a share, from $28 million, or 17 cents a share, a year ago.
Total revenue soared 24 percent at $2.52 billion.
Consolidated operating income was $154 million in the first quarter of 2008, up sharply from $45 million.
Operating income was lifted by a $51 million gain related to an arbitration award and contributions from various energy projects, including the Scotford Upgrader in Canada, the Yanbu refinery project in Saudi Arabia and the company's work in Iraq.
Gains in operating income were partially offset by a $12 million charge related to the U.S. Embassy project in Macedonia, the company said.
Bill Utt, KBR's chief executive officer, said in a statement that the company is working hard to put the Macedonia project back on track and complete it.
KBR's upstream unit, which provides services to oil and gas exploration and production companies, had income of $105 million, up sharply from $20 million a year ago.
The company's government and infrastructure unit income was $80 million, up from $70 million. The company cited gains from its work in Iraq, where it is the Pentagon's largest U.S. contractor.
Last month, the U.S. Army chose KBR, Fluor Corp (FLR.N) and DynCorp International Inc DCP.N to compete to provide housing, laundry and other support services to the U.S. military worth up to $150 billion.
Shares of KBR climbed $1.97, or 7 percent, at $30.50 on the New York Stock Exchange.
(Additional reporting by Euan Rocha and Aarthi Sivaraman, editing by Dave Zimmerman)
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