UPDATE 1-KBR third-quarter revenue drops 9 pct, misses forecasts

Thu Oct 24, 2013 5:10pm EDT

Oct 24 (Reuters) - Engineering company KBR Inc on Thursday reported lower quarterly revenue and profit that missed forecasts due partly to a tax settlement, and said it expected full-year earnings at the low end of its own expectations.

This month, KBR had announced an unfavorable ruling in a tax dispute with its former parent, Halliburton Co, which reduced third-quarter earnings by $38 million, or 26 cents per share.

Chief Executive Bill Utt said several other non-operational tax items and delays to project close-outs also affected its earnings in the quarter, while operating income was up 35 percent from the previous quarter.

Its backlog of projects increased to $14.2 billion at the end of September from $13.8 billion three months earlier.

"We continue to see a strong opportunity set of major projects across all of our businesses," Utt said in a statement. "However, we expect the near term competitive environment for new awards to continue."

Third-quarter profit was $24 million, or 16 cents per share, compared with a loss of $81 million, or 55 cents per share. The previous year's loss was caused by a writedown on a 2010 acquisition. Revenue fell 9 percent to $1.81 billion.

Analysts had been looking for earnings of 70 cents per share on revenue of $2 billion, according to Thomson Reuters I/B/E/S.

Houston-based KBR said it now expected 2013 earnings to be at the low end of its predicted range of $2.55 to $2.90 per share, whereas analysts had been targeting $2.67 on average.

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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