By Ezequiel Minaya
Engineering company KBR Inc. swung to a profit for the June
quarter, helped by cost cuts and the recent sale of its building
group unit.
The Houston-based company said the $23 million in cash proceeds
from the sale to Pernix Group Inc. helped to offset declines in
government contracts and customers facing the pinch of plunging oil
prices. The move, along with recent cost cuts, led KBR to increase
its full-year earnings guidance on Tuesday for adjusted per-share
earnings by 15 cents to a range between $1.22 and $1.37.
KBR was formerly known as Kellogg Brown & Root and is a
former subsidiary of Halliburton Co.
The sale of the building group was part of KBR's restructuring,
which aims to focus company's operations on hydrocarbons and
international government services. KBR has said it hopes the
restructuring, which is expected to cost $800 million to $1
billion, will save the company at least $200 million annually by
2016.
In all, KBR reported a second-quarter profit of $62 million, or
43 cents a share, compared with a loss of $8 million, or 6 cents a
share, a year earlier. Excluding legal fees and other items,
per-share earnings were 46 cents in the latest quarter. Revenue
fell to $1.4 billion from $1.7 billion a year earlier.
Analysts polled by Thomson Reuters had expected a per-share
profit of 27 cents and revenue of $1.38 billion.
Engineering-and-construction revenue fell to $1 billion from
$1.26 billion, though the sector's profit grew by $19 million to
$52 million.
The company posted revenue of $158 million in its
government-services segment, unchanged from the previous year and a
$1 million loss, also the same as in 2014.
Technology and consulting revenue fell to $80 million from $100
million a year earlier; however, this sector's profit grew $6
million to $21 million overall.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
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