Government engineering and services vendor KBR (KBR 0.09%) delivered on expectations in its most recent quarter, but its outlook for what is to come appears to be underwhelming investors. Shares of KBR are down more than 13% as of noon ET Thursday after the company stood pat on its guidance for the year.

Results were fine, but investors were hoping for great

KBR has its roots in energy construction, but the modern company provides engineering and IT solutions for government and corporate customers. It earned $0.75 per share in the third quarter on revenue of $1.77 billion, largely in line with Wall Street expectations for $0.74 per share in earnings on sales of $1.8 billion.

The company grew organic revenue by 9% year over year, primarily thanks to new and bolt-on contracts from its government solutions unit. Adjusted EBITDA came in at $186 million, up 9% year over year, a margin of about 11%.

But investors are likely more focused on the guidance. KBR backed its guidance for full-year earnings of between $2.76 and $2.96 per share on revenue of between $6.9 billion and $7.1 billion. At the midpoint, that implies some downside risk to the $2.91 per share on revenue of $7.04 billion consensus estimate.

The company's book-to-bill, a measure of new business coming in compared to what was billed out, was a modest 1.1 times for the quarter. Its sustainable technology unit did slightly better at 1.3 times billings, fueled by awards related to hydrogen processing and other energy projects.

Is KBR stock a buy after its post-earnings plunge?

KBR has been viewed by defense investors as a government services growth story, with the shares up about 180% over the past three years heading into earnings. There was nothing in the quarter to suggest that the company, or the thesis, is in trouble, but the guidance is likely causing a rethink among investors who are focused on momentum.

For long-term holders, there is still a lot to like about KBR. The company is in the early stages of implementing some key programs, laying the foundation for strong growth in 2024.