KBR Inc. (NYSE:KBR) on Friday slashed its earnings outlook for the full year mainly due to unexpected costs associated to two EPC (electric power-generating) facilities that will likely effect its profit.
The company’s CEO Stuart Bradie said ‘’while the cost increases are highly disappointing, particularly on the power project, these legacy projects are nearing completion and we will not execute any new stand-alone fixed-price EPC power projects.”
The Houston, Texas-based company said that it is now anticipating earnings in a range of 30 cents per share to 50 cents per share for the full year, below its previous guidance in between $1.20 per share to $1.45 per share.
The revised forecast is well below $1.45 per share estimated by analysts surveyed by Thomson Reuters.
The latest guidance doesn’t include legal expenses of $15 million, or 11 cents per share linked with legacy United States government contracts.
Decline in certain contracts and the impact of lower energy prices on the capital spending budgets of firms has forced KBR to reform its operations and focus on profitable government services business.
KBR shares have plummeted nearly 11 percent so far this year. The 52-week range of the stock is $11.60-$19.94. The company’s market cap is $2.19 billion and P/E ratio is 11.64.