) reported second-quarter 2013 earnings at 61 cents per share,
beating the Zacks Consensus Estimate of 57 cents by 7%. However,
earnings were down 12.8% from the prior-year tally of 70 cents
due to nonrecurring charges related to office closure and
Revenues came in at $2.0 billion compared with $2.1 billion in
the second quarter of 2012. However, revenues in the reported
quarter exceeded the Zacks Consensus Estimate of $1.9 billion.
The year-over-year decline in revenue was due to lower
contributions from both IGP and Hydrocarbons business groups,
lower project activity and the completion of the Escravos GTL and
Skikda LNG projects. However, the performance of the Services
segment and the Downstream division within the Hydrocarbon
segment was praiseworthy
Revenues in the
segment were down 15% year over year to $955 million. The job
income of the segment was up 8% year over year, driven by growth
in job income from Gas Monetization, Downstream and Technology,
partially offset by fall in Oil and Gas job income. Backlog at
quarter-end was $8.75 billion, flat quarter over quarter as a
rise in the number of projects from Downstream and Technology was
offset by fall in Gas Monetization and Oil and Gas projects.
Infrastructure, Government and Power
(IGP) segment's revenues in the quarter declined 20% year over
year to $392 million. In addition, job income from the segment
contracted 2% to $62 million. The rise in job income from the
North American Government and Logistics (NAGL) and International
Government, Defence and Support Services (IGDSS) segments were
offset by fall in job income from Infrastructure, Power and
Industrial (P&I) and Minerals. Backlog was $2.26 billion,
down 10.6% quarter over quarter, due to lesser number of projects
across the business.
reported revenue growth of 46% during the quarter to $622
million, while job income was up 31% to $38 million. The increase
in job income was primarily driven by several new module
fabrications and turnaround projects in Canada. Backlog in the
services segment was down 9.96% quarter over quarter to $1.86
segment revenues increased 26.7% year over year to $19 million.
Moreover, job income was up 20% to $12 million, driven by lower
project maintenance costs in the U.K. Backlog was project
maintenance costs in the U.K. Backlog was flat quarter over
quarter at $931 million.
Margins and Balance Sheet
Operating income in the second quarter of 2013 was $123
million, compared with $129 million in the prior-year quarter.
Operating margin grew 139 basis points to 12.88%, on the back of
higher job income, partly offset by increased labor costs.
KBR ended the quarter with cash and cash equivalents of $800
million, compared with $1.05 billion as of Dec 31, 2012.
Net cash flow from operating activities for the first half of
2013 was negative $97 million, compared with negative $55 million
in the prior-year quarter.
Along with the earnings release, the company revised the lower
end of its earnings guidance in the range of $2.55-$2.90 per
share, from $2.45- $2.90 projected earlier.
Currently, KBR carries a Zacks Rank #4 (Sell). Better placed
stocks in the same sector that are worth a look include
Dycom Industries Inc
Chicago Bridge & Iron Company N.V.
EMCOR Group Inc.
). While both Dycom and Chicago Bridge have a Zacks Rank #1
(Strong Buy), EMCOR carries a Zacks Rank #2 (Buy).
CHICAGO BRIDGE (CBI): Free Stock Analysis
DYCOM INDS (DY): Free Stock Analysis Report
EMCOR GROUP INC (EME): Free Stock Analysis
KBR INC (KBR): Free Stock Analysis Report
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