KBR reports surprising first-quarter earnings on arbitration award

Posted May 2nd 2008 9:30AM by Eliza Popescu
Filed under: International Markets, Earnings Reports, Good news

KBR Inc. (NYSE: KBR), an engineering and construction company that was once a unit of Halliburton Co. (NYSE: HAL), reported this morning that profit more than doubled for its first-quarter as the company benefited from a arbitration award gain.

KBR posted earnings for the quarter of 58 cents per share, which was much higher than the 34 cents per share that analysts predicted. The income figures were definitely something to cheer about. During its first quarter last year, the company had a profit of $28 million. That number surged this quarter to $98 million.

Analysts had been expecting revenue of $2.30 billion, but KBR surprised everyone by posting $2.52 billion in sales, a 24.3% increase, during the quarter. This is a nice rebound from the same period last year when the military contractor's sales were $2.03 billion.

One of the factors contributing to the company's positive earnings figures was a project with Petroleos Mexicanos which brought a gain of $51 million. Military contract work in Iraq added $80 million in profit to the company's government and infrastructure division. On the other had, the engineering and construction firm took a charge of $12 million tied to a U.S. Embassy project in Macedonia.

Traders expressed enthusiasm over the company's surprising earnings by pushing shares up 8.66% in the premarket.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

Tags: earnings, engineering, KBR, military