(Adds comparison, CEO quote, backlog, shares)
July 25 (Reuters) - Engineering company KBR Inc posted an unexpected rise in quarterly profit on Wednesday and tightened its 2012 earnings outlook to capture the upper end of its previous forecast.
Its second-quarter net profit rose 4 percent to $104 million, or 70 cents per share, from $100 million, or 65 cents per share, a year earlier. Analysts, on average, had expected 58 cents per share, according to Thomson Reuters I/B/E/S.
"During the second quarter, KBR delivered strong project execution and recognized better than expected project incentives, cost recoveries, and construction progress that allowed us to reduce estimates to complete for several projects in construction," Chief Executive Bill Utt said in a statement.
Revenue fell 16 percent to $2.06 billion, below the $2.2 billion expected by analysts. Revenues this year are depressed by the wind-down of U.S. military operations, which are expected to generate $375 million to $450 million in revenue in 2012 - about a quarter of the 2011 level.
The Houston-based company updated its 2012 earnings forecast to $2.60 to $2.80 per share, raising the lower end of the range from $2.45 per share previously.
KBR's backlog fell to $15.2 billion in the second quarter from $15.75 billion three months before, though that was up 27 percent on the year before.
KBR shares were trading 4 cents lower at $22.88 in after-hours trading on Wednesday. (Reporting by Braden Reddall in San Francisco; Editing by Gary Hill and Tim Dobbyn)