By late morning, shares had slipped 4.4% to $24.71.
The construction company said it had determined the estimated costs to complete seven Canadian pipe fabrication contracts will result in pre-tax charges of $158 million. This would consist of the reversal of $23 million in previously recognized pre-tax profits and the recognition of around $135 million in pre-tax estimated losses at completion.
"The negative cash impact associated with the work released to date under the seven contracts has largely been incurred and the forecast net negative cash flow to complete this work is expected to be less than $45 million," the company said in a statement.
"We believe that the majority of these losses should have been recognized in our consolidated financial statements for the year ended December 31, 2013."
Additionally, the company identified overstated revenue recognition on a long-term construction project of around $9 million.
KBR expects to amend its financial statements and release revised copies.
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, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins."