KBR Inc (KBR) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $63 million, or $ 0.44 a share in the quarter, against a net profit of $55 million, or $0.38 a share in the last year period.
Revenue during the quarter dropped 10.51 percent to $1,073 million from $1,199 million in the previous year period. Gross margin for the quarter stood at negative 3.36 percent as compared to a positive 7.26 percent for the previous year period. Operating margin for the quarter stood at negative 6.24 percent as compared to a positive 6.26 percent for the previous year period.
Operating loss for the quarter was $67 million, compared with an operating income of $75 million in the previous year period.
“During the quarter, we concluded the acquisitions of two professional services companies which provide high-end technology solutions for government clients. The addition of Wyle and Honeywell's services business (HTSI) to our portfolio adds a large number of reimbursable professional services contracts executed by over 7,000 highly-skilled employees. These acquisitions provide more balance between our Hydrocarbons and Government Services businesses. Therefore, despite the disappointing results on the two projects this quarter, implementation of KBR’s strategic plan remains on course," said Stuart Bradie, president and chief executive officer of KBR, Inc.
For fiscal year 2016, the company expects diluted earnings per share to be in the range of $0.30 to $0.50.
Operating cash flow turns positive
KBR Inc has generated cash of $8 million from operating activities during the nine month period as against cash outgo of $85 million in the last year period.
The company has spent $922 million cash to meet investing activities during the nine month period as against cash inflow of $48 million in the last year period
Cash flow from financing activities was $600 million for the nine month period as against cash outgo of $128 million in the last year period.
Cash and cash equivalents stood at $569 million as on Sep. 30, 2016, down 25.91 percent or $199 million from $768 million on Sep. 30, 2015.
Working capital drops significantly
KBR Inc has witnessed a decline in the working capital over the last year. It stood at $240 million as at Sep. 30, 2016, down 46.19 percent or $206 million from $446 million on Sep. 30, 2015. Current ratio was at 1.15 as on Sep. 30, 2016, down from 1.29 on Sep. 30, 2015.
Days sales outstanding went up to 67 days for the quarter compared with 59 days for the same period last year.
Debt increases substantially
KBR Inc has witnessed an increase in total debt over the last one year. It stood at $699 million as on Sep. 30, 2016, up 959.09 percent or $633 million from $66 million on Sep. 30, 2015. Total debt was 16.48 percent of total assets as on Sep. 30, 2016, compared with 1.81 percent on Sep. 30, 2015. Debt to equity ratio was at 0.64 as on Sep. 30, 2016, up from 0.07 as on Sep. 30, 2015.
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