Share price of
) has trended downward since the company badly missed the
earnings estimate with its fourth quarter results on Feb 27.
Share price tanked nearly 15% to close at $27.18 on Mar 3.
The company's adjusted net income for the quarter was 52 cents
per share, falling significantly short of the Zacks Consensus
Estimate of 90 cents. KBR reported GAAP net income of $27 million
or 18 cents a share compared with the year-ago quarter's net
income of $30 million or 20 cents per share.
However, for full-year 2013, the company reported GAAP net
income of $229 million or $1.54 per share, an increase from the
last year's income of $144 million or $0.97 per share.
Revenues came in at $1.7 billion compared with $1.8 billion in
the fourth quarter of 2012. The revenues also fell significantly
short of the Zacks Consensus Estimate of $1.9 billion. The
decline was primarily due to the company's adverse tax conditions
along with additional legal and foreign exchange charges that
were not anticipated earlier.
Moreover, delays in completion of a number of projects dragged
the revenues lower. However, the company's strong cash flow and a
healthy book-to-bill ratio partially offset the negatives.
The company's gross profit in the quarter increased to $84
million from $60 million in the prior-year quarter.
segment's revenues declined 40.7% year over year to $432 million.
The decline in revenues was primarily attributed to low project
activity in two Africa-based projects during the quarter.
Moreover, prior-year revenues had benefited from the one-time
favorable impact from a project in Australia.
Revenues in the
segment increased 24.8% year over year to $432 million. The
revenue growth came on the back of developments in the downstream
ammonia, urea and ethylene projects in key regions like North
America, Uzbekistan, and Azerbaijan. Prior-year revenues also
included the benefit from a project settlement.
Infrastructure, Government and Power
(IGP) segment's revenues in the quarter declined 15.5% year over
year to $387 million. The decline was driven by reductions in
infrastructure- and mineral-based projects. However, the
company's businesses were modest in international government,
power generation and air quality control projects in the U.S.
segment reported revenue growth of 5.9% during the quarter to
$460 million. The increase in revenues was primarily driven by
several new module fabrication projects in Canada and the absence
of charges amounting to $62 million that occurred in the
KBR ended the quarter with cash and cash equivalents of $1.1
million, compared with $1.05 billion as of Dec 31, 2012.
Operating cash flow from this quarter was $209 million.
The board of directors also approved a $350 million share
buyback program in an effort to share more profit with its
Along with the earnings release, the company provided its
guidance for 2014 results. It expects the earnings per share
(EPS) to lie between $1.75 and $2.10 while enterprise resource
planning (ERP) expenses and capital expenditures are expected to
be in the bands of $55-$65 million and $65-$80 million
respectively. The capital expenditure also includes additional
ERP charges between $25 million and $35 million.
KBR currently holds a Zacks Rank #4 (Sell).
Performance of Other Stocks in the Same Sector
Chicago Bridge & Iron Co. N.V.
) posted fourth-quarter adjusted earnings of $230.0 million or
$1.91 per share, which easily beat the Zacks Consensus Estimate
of $1.17 per share.
Quanta Services Inc.
) reported fourth-quarter 2013 non-GAAP earnings of 50 cents per
share, beating the Zacks Consensus Estimate by 22%.
) fourth-quarter 2013 net earnings of $167 million or $1.01 per
share surpassed the Zacks Consensus Estimate of 98 cents by
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