Energy-focused engineering and construction firm
McDermott International (
reported better-than-expected first quarter 2012 earnings on the
back of lower costs. Earnings per share from continuing operations
came in at 25 cents, significantly above the Zacks Consensus
Estimate of 16 cents.
However, the Texas-based engineering-to-project management
service provider's per share profits came slightly lower than the
first quarter 2011 level of 29 cents amid depressed marine activity
in the Asia Pacific unit and a dip in fabrication man-hours. These
factors were partially offset by improvement in the domestic
McDermott generated revenues of $727.7 million in the quarter,
down 19.1% from the first quarter 2011 and failed to meet our
estimate of $842.0 million.
The company's operating income was $80.2 million (down 20.1%
year over year) in the quarter, while total costs and expenses fell
19.8% from the corresponding period last year to $643.8
At the end of the first quarter, McDermott had a backlog of
$5,806.6 million, compared with $4,764.0 million a year ago. As of
December 31, 2011, backlog was $3,881.1 million.
As of March 31, 2012, McDermott had cash/cash equivalents of
$789.0 million and long-term debt (including current maturities) of
approximately $92.2 million (representing a debt-to-capitalization
ratio of approximately 4.9%).
About the Company
McDermott, which currently retains a Zacks #5 Rank (short-term
Strong Sell rating), primarily serves the worldwide offshore oil
and gas field developments, including front-end design and detailed
engineering, fabrication and installation of offshore drilling and
production facilities, as well as installation of marine pipelines
and subsea production systems.
Additionally, the company provides project management and
procurement services. It operates in most major offshore oil and
gas producing regions, including the U.S., Mexico, Canada, the
Middle East, India, the Caspian Sea and Asia Pacific.
In August 2010, McDermott completed the spin-off of its 'Power
Generation Systems' and 'Government Operations' segments into a
separate, independent and publicly traded company
The Babcock & Wilcox Co. (
BABCOCK&WILCOX (BWC): Free Stock Analysis
MCDERMOTT INTL (MDR): Free Stock Analysis
To read this article on Zacks.com click here.