UPDATE 2-KBR Q2 net tops view, to seek new Iraq contracts
Thu Jul 30, 2009 1:08pm EDT Email | Print | Share| Reprints | Single Page[-] Text [+]
* Q2 EPS 42 cents/shr, tops average analyst view by penny

* Q2 revenue $3.1 billion; backlog $12.35 billion

* Shares rise 4.6 pct, near 10-month high (Adds details, quote from conference call, share price)

NEW YORK/SAN FRANCISCO, July 30 (Reuters) - Engineering and construction company KBR Inc (KBR.N) reported a rise in quarterly profit on Thursday as revenue surged 17 percent on strength in its businesses serving the oil and gas industry.

Shares of KBR gained 4.6 percent to $20.49, near its highest level in more than 10 months.

By the end of June, KBR's backlog slipped to $12.35 billion from $14.1 billion at the end of last year and $12.8 billion at the end of March. Still, the company is optimistic about the amount of work that is yet to be awarded.

Chief Executive Bill Utt said KBR had no plans to lodge a protest over rivals winning two big military support contracts in Afghanistan this month. [ID:nN08397324]

The Houston-based company will continue to pursue contract renewals in Iraq, which are due later this year or early 2010, though Utt could not give a clear view of Middle East earnings for next year since so much depends on U.S. troop withdrawals.

As for the company as a whole, he expected more bidding activity in the second half of 2009 than in the past year.

"We're generally very comfortable that there will be enough work out there," Utt told analysts on a conference call.

Some of KBR's big potential wins are liquefied natural gas projects in and around Australia. Chevron Corp (CVX.N) expects to make a final investment decision on its massive Gorgon LNG project off Western Australia in the coming months. KBR won the front-end engineering and design (FEED) contract.

In June, Exxon Mobil Corp (XOM.N) awarded a joint venture of KBR and Australia's WorleyParsons Ltd (WOR.AX) a services contract for Exxon's Papua New Guinea LNG project.

KBR said its second-quarter net income was $67 million, or 42 cents per share, up from $48 million, or 28 cents per share, in the second quarter of 2008. The result topped analysts' estimates by a penny, according to Reuters Estimates.

Revenue rose to $3.1 billion from $2.7 billion.

Shares of KBR have risen 34 percent in 2009, compared with an 18 percent rise for the publicly traded U.S. sector leader, Fluor Corp (FLR.N). (Reporting by Braden Reddall in San Francisco and Matt Daily in New York; editing by Jeffrey Benkoe)