By Angela Chen
KBR Inc. swung to a profit in its first quarter as cost cuts
helped offset declining sales.
KBR has termed 2015 a "transition year" and is working to reduce
$200 million in costs annually. The contractor has been affected by
the tumbling gas prices.
"While oil prices remain depressed, KBR's technology and project
delivery capability for natural gas derivative products and
associated downstream facilities positions us well for project
awards during 2015," said Chief Executive Stuart Bradie.
The former Halliburton Co. unit had been one of the key U.S.
government contractors in Iraq following the 2003 invasion,
providing logistical support for American forces, among other
tasks. KBR has suffered declining revenue as defense budgets in the
U.S., which has withdrawn from Iraq and scaled back its presence in
Afghanistan, have been tight.
In December, KBR announced plans to restructure its operations
and shed or exit some noncore segments following a strategic review
aimed at reducing operating costs, though it has said it plans to
continue with its overseas troop-support business.
In all, KBR reported a profit of $44 million, or 30 cents a
share, compared with a loss of $43 million, or 29 cents a share, a
year earlier. Excluding legal fees and other items, per-share
earnings were 33 cents.
Revenue fell to $1.4 billion from $1.6 billion a year
earlier.
Analysts polled by Thomson Reuters expected a per-share profit
of 17 cents and revenue of $1.38 billion.
Technology and consulting revenue fell to $72 million from $91
million a year earlier. However, its profits grew by $4 million to
$19 million overall.
Engineering-and-construction revenue fell to $1 billion from
$1.16 billion, though its profit grew by $26 million to $55
million.
Government-services revenue fell to $155 million from $186
million a year earlier. Profit also fell $4 million, mostly due to
a reduction in support services for U.K. military operations in
Afghanistan.
Shares, inactive premarket, have declined about 6% this year
through Tuesday's close.
Write to Angela Chen at angela.chen@dowjones.com
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