ConDig (28-Apr-17).  KBR Inc reported a 14% drop in profit in the first quarter of this year despite revenue rising 11%.

The Houston-based engineering and construction company booked net income of $37 million for the three months ended March 31, down from $42 million in the same period last year.

The drop comes despite revenue increasing to $1.1 billion from $996 million in the year-ago period. The rise was driven by recent acquisitions in the group’s government services division and contracts with the US Military. 

KBR’s engineering and construction division reported a $4 million rise in gross profit to $33 million from a year earlier due to solid project performance as well as lower overheads following recent cost reduction activities.

It comes despite revenue in the division dipping to $489 million from $606 million in the wake of reduced activity across the sector, but this was partially offset by projects ramping up from new contract awards last year.

KBR said earlier this month that it had settled a decade long dispute over an almost half billion judgment pertaining to the EPC 1 construction project for PEMEX Exploración y Producción.

Under the settlement to booked in the second quarter, the company has been paid $435 million for costs and fees owed for its work on the construction project. 

“We achieved predictable, consistent and profitable performance in our government services and technology and consulting segments, plus good progress on a number of engineering and construction projects, including the achievement of reaching substantial completion of our final EPC power project.” said Stuart Bradie, president and chief executive office of KBR.