By late morning, shares had taken off 15% to $27.16.
The construction and engineering company recorded net income of 18 cents a share compared to 20 cents a share a year earlier.
"Earnings for the quarter were significantly less than anticipated," said CEO Bill Utt in a statement. Fourth-quarter guidance was not given in the third-quarter release.
Revenue tumbled 9.1% year over year to $1.7 billion. Analysts surveyed by Thomson Reuters had forecast revenue of $1.93 billion. This marks the eighteenth consecutive quarter of revenue declines.
Over fiscal 2014, management guides for earnings per share between $1.75 and $2.10. Analyst consensus was for $2.69 a share.
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TheStreet Ratings team rates KBR INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate KBR INC (KBR) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including relatively poor performance when compared with the S&P 500 during the past year and poor profit margins."