KBR announced today that first quarter 2013 net income attributable to KBR was $88 million, or $0.59 per diluted share, compared to net income attributable to KBR of $91 million, or $0.61 per diluted share, in the first quarter of 2012.
Consolidated revenue in the first quarter 2013 was $1.9 billion compared to $2.0 billion in the first quarter of 2012. Operating income in the first quarter 2013 was $133 million compared to operating income of $112 million in the prior year first quarter.
“KBR’s first quarter performance was consistent with our expectations. We delivered $0.59 of EPS on strong project execution across all of KBR’s businesses, including on the five problem projects we discussed in the fourth quarter where no incremental provisions were taken in the first quarter,” said Bill Utt, Chairman, President, and Chief Executive Officer of KBR. “We continue to see strong prospects for growth across our businesses and remain confident in our ability to successfully win and execute new work going forward.”
Hydrocarbons revenue was $947 million, down $169 million, or 15%. Hydrocarbons job income was $180 million, up $44 million, or 32%.
Gas Monetization job income was $104 million, up $25 million, or 32%, primarily related to continued strong execution, increased volumes at several LNG projects, and the close out of projects nearing completion.
Oil and Gas job income was $25 million, up $2 million, or 9%, primarily related to higher work volumes on the Shah Deniz project, FEED work for an FPSO in Angola and engineering and design work for a semi-submersible unit and a drilling platform. Partially offsetting the increase was the completion or near completion of several projects.
Downstream job income was $26 million, up $12 million, or 86%, primarily related to increased profits from an ethylene project in Uzbekistan, a gasifier FEED in Saudi Arabia, and the KBR-AMCDE entity in Saudi Arabia. Partially offsetting the increase was the completion of engineering on a refinery project in Africa.
Technology job income was $25 million, up $5 million, or 25%, primarily related to several new ammonia projects in the United States, Bolivia, Nigeria, Indonesia, India and Hungary as well as an ethylene project in Uzbekistan and a VCC project in Russia. Partially offsetting the increase was the completion of ammonia projects in Brazil and Egypt and an aniline project in China.
Infrastructure, Government and Power (IGP) Results
IGP revenue was $407 million, down $111 million, or 21%. IGP job income was $63 million, down $12 million, or 16%.
North American Government and Logistics (NAGL) job income was $20 million, up $5 million, or 33%, primarily related to award fee and base fee close-out items on the completed LogCAP III program in Iraq.
International Government, Defence and Support Services (IGDSS) job income was $22 million, down $14 million, or 39%, primarily related to lower work volumes on the Allenby & Connaught and Afghanistan ISP projects.
Infrastructure job income was $10 million, down $5 million, or 33%, primarily related to lower work volumes on water, transportation and facilities projects. The decrease was partially offset by higher activity on the Doha Expressway project in Qatar.
Power and Industrial (P&I) job income was $8 million, down $2 million, or 20%. Higher activity on a waste-to-energy expansion project and work performed on an emissions control EPC project was more than offset by the substantial completion of engineering activity on a coal gasification project and the completion of an industrial project in Louisiana.
Minerals job income was $3 million, up $4 million, or 400%, primarily related to charges taken on a legacy EPC project in the first quarter of 2012 that did not recur in the first quarter of 2013.
Services revenue was $485 million, up $137 million, or 39%. Services job income was $31 million, up $3 million, or 11%, primarily related to several new module fabrication and turnaround projects ramping in Canada.
Ventures job income was $8 million, flat with the prior year.
First quarter of 2013 corporate general and administrative expense was $52 million.
First quarter of 2013 labor cost absorption expense was $15 million due to expected under-absorption of KBR’s centralized engineering resources.
Total cash used in operating activities in the first quarter of 2013 was $93 million.
The effective tax rate for the first quarter of 2013 was approximately 23% compared to 9% for the first quarter of 2012.
During the first quarter of 2013, KBR had share repurchases of $6 million, capital expenditures of $20 million and pension contributions of $7 million for total cash deployment of $33 million.
Full Year 2013 Guidance
2013 earnings per diluted share guidance remains $2.45 to $2.90.
Press Release, April 26, 2013