Engineering and construction company KBR Inc. said Thursday that its fourth-quarter earnings fell 17 percent as U.S. military work in Iraq declined and some contract fees were reversed, and it trimmed the low end of its full-year outlook.
Profit for the fourth quarter slid to $73 million or 45 cents a share, from $88 million, or 54 cents a share, a year earlier. Revenue fell 12 percent to $2.96 billion from $3.39 billion in the 2008 quarter.
The company's biggest division — government and infrastructure — posted a $109 million loss for the period. Among other charges, KBR reversed $112 million in previously booked award fees on its LogCAP contract, which covers services to U.S. troops and government officials in Iraq. The contract covers everything from construction to laundry service.
The U.S. plans to cut its troop level in Iraq to between 35,000 and 50,000 personnel by the end of the summer, from 120,000. The move has reduced demand for KBR's services.
The results still beat estimates of analysts polled by Thomson Reuters, who had expected earnings of 39 cents a share on $2.81 billion in revenue.
KBR previously forecast 2010 earnings per share between $1.60 and $1.80. After writing off the lost award fees, it now sees the low end of its guidance at $1.50 per share.
"Nonetheless, we continue to be optimistic about KBR's ability to deliver continued growth in our overall business despite an expected continued decline in LogCAP volumes," Bill Utt, KBR chairman, president and CEO, said in a statement.
For the year, KBR posted net income of $290 million, or $1.79 a share, down from $319 million, or $1.84 per share, in 2008. Revenue declined 5 percent to $12.11 billion from $11.58 billion.
Shares rose 3 cents to close at $20.34.