KBR announced that third quarter 2011 net income attributable to KBR was $185 million, or $1.22 per diluted share, compared to net income attributable to KBR of $97 million, or $0.62 per diluted share, in the third quarter of 2010.
Consolidated revenue in the third quarter was $2.4 billion compared to $2.5 billion in the third quarter of 2010. Operating income was $138 million compared to $163 million in the prior year third quarter. Third quarter operating income, when compared to the prior year third quarter, was impacted by an increase in forecast man-hour backlog on the Gorgon project which reduced the project’s percentage of completion, lower award fee pools on the LogCAP III project, a charge on a Roberts & Schaefer project, and lower volumes at Downstream and Services.
Hydrocarbons revenue and income was $1.1 billion and $89 million, up 15% and down 4%, respectively, compared to the third quarter of 2010. Infrastructure, Government, and Power (IGP) revenue in the third quarter was $876 million, which included an expected revenue reduction of $150 million compared to the prior year third quarter related to reduced activity on the LogCAP contracts. IGP income was $78 million in the third quarter, down $5 million or 6%, compared to the prior year third quarter. As a result of a smaller award fee pool, IGP received award fees of $22 million in the third quarter of 2011 compared to $34 million in the third quarter of 2010. Services revenue and income in the third quarter was $370 million and $15 million, down 23% and 42%, respectively, compared to the third quarter of 2010.
“ Overall I am pleased with our continued strong project execution across all of KBR’s businesses, ” said Bill Utt, Chairman, President, and Chief Executive Officer of KBR . “ KBR’s job income backlog continues to strengthen with a 10% increase in job income backlog during 2011 despite a 3% reduction in revenue backlog. We are also seeing improved conditions in the U.S. construction and power markets, as well as continued work for the U.S. government in Iraq as the mission transitions from a military to State Department focused mission .”
Hydrocarbons Results
Gas Monetization job income was $52 million compared to job income of $59 million in the third quarter of 2010. During the third quarter of 2011, the Gorgon LNG, Skikda LNG, Escravos GTL, Pearl GTL, and Browse LNG FEED projects continued to progress; however, as mentioned earlier, job income was negatively impacted by an increase in the forecast Gorgon man-hour backlog which reduced the project’s percentage of completion.
Oil and Gas job income was $27 million compared to job income of $24 million in the third quarter of 2010. The increase in job income was primarily related to the CLOV FPSO project as well as several new projects, including Shah Deniz 2, Quad 204, South Arne, and Bigfoot. Partially offsetting the increase in job income was the completion or near completion of several projects, including North Rankin 2.
Downstream job income was $18 million compared to job income of $23 million in the third quarter of 2010. The decrease in job income was primarily related to the reduced work on the Saudi Kayan ethylene project, Lobito refinery FEED, and Shaybah NGL projects. Partially offsetting this decrease was interim EPCm work on the Lobito refinery and increased activity on several projects in the United States.
Technology job income was $17 million compared to job income of $14 million in the third quarter of 2010. The increase in job income was primarily related to several new projects, including ammonia license and basic engineering projects, proprietary equipment sales, and the sale of a ROSE™ unit. The increase in job income was partially offset by the completion of several projects in Turkmenistan, India, and Brazil.
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Source: KBR, October 28, 2011