Energy-focused engineering and construction company McDermott International (MDR) reported better-than-expected first-quarter earnings, driven by robust performance from the Offshore Oil and Gas Construction segment. Earnings per share, excluding costs related to a planned spin-off, came in at 38 cents, 2 cents above the Zacks Consensus Estimate and 5 cents above the prior-year period.
However, revenue of $1.2 billion was down 20.9% from the first quarter 2009 level, reflecting lower sales in all the company’s segments.
Segment Performance
McDermott’s segment results are as follows:
Offshore Oil and Gas Construction: Segment revenues were down 26.7% to $519.5 million as higher sales in the Asia Pacific were more than offset by reduced levels in other areas.
Income for the quarter came in at $82.8 million, compared with $45.0 million during the first quarter of 2009, reflecting strength in Asia-Pacific and improved project performance in McDermott’s Middle East region.
As of March 31, 2010, segment backlog was $4.2 billion, as against a backlog of $5.0 billion in the year-ago period.
Government Operations: The segment fetched revenues of $253.3 million, down slightly from the $257.1 million achieved in the first quarter of 2009, mainly due to lower volumes in the manufacture of components for a commercial uranium enrichment project, and lower volumes in the company’s commercial manufacturing operations partially offset by increased volumes in the manufacture of nuclear components for certain U.S. Government programs and recovery work.
Income for the quarter was down 21.4% to $36.0 million, attributable to the temporary shutdown at McDermott’s Nuclear Fuel Services subsidiary.
McDermott’s backlog at the end of the quarter was $2.8 billion, up $100 million year over year.
Power Generation Systems: Revenues for McDermott’s Power Generation Systems segment decreased 22.5% to $409.7 million, adversely affected by reduced activity on customers’ major capital projects including new power plant construction and retrofits of existing power plants.
Income was down significantly (by 84.0%) to $9.3 million on the back of lower margins in the company’s utility steam and system fabrication operations, and the fabrication, repair and retrofit of existing facilities operations, as well as decrease in revenues.
McDermott ended the quarter with a backlog of $2.0 billion, compared with a backlog of $2.2 billion in the previous-year quarter.
However, revenue of $1.2 billion was down 20.9% from the first quarter 2009 level, reflecting lower sales in all the company’s segments.
Segment Performance
McDermott’s segment results are as follows:
Offshore Oil and Gas Construction: Segment revenues were down 26.7% to $519.5 million as higher sales in the Asia Pacific were more than offset by reduced levels in other areas.
Income for the quarter came in at $82.8 million, compared with $45.0 million during the first quarter of 2009, reflecting strength in Asia-Pacific and improved project performance in McDermott’s Middle East region.
As of March 31, 2010, segment backlog was $4.2 billion, as against a backlog of $5.0 billion in the year-ago period.
Government Operations: The segment fetched revenues of $253.3 million, down slightly from the $257.1 million achieved in the first quarter of 2009, mainly due to lower volumes in the manufacture of components for a commercial uranium enrichment project, and lower volumes in the company’s commercial manufacturing operations partially offset by increased volumes in the manufacture of nuclear components for certain U.S. Government programs and recovery work.
Income for the quarter was down 21.4% to $36.0 million, attributable to the temporary shutdown at McDermott’s Nuclear Fuel Services subsidiary.
McDermott’s backlog at the end of the quarter was $2.8 billion, up $100 million year over year.
Power Generation Systems: Revenues for McDermott’s Power Generation Systems segment decreased 22.5% to $409.7 million, adversely affected by reduced activity on customers’ major capital projects including new power plant construction and retrofits of existing power plants.
Income was down significantly (by 84.0%) to $9.3 million on the back of lower margins in the company’s utility steam and system fabrication operations, and the fabrication, repair and retrofit of existing facilities operations, as well as decrease in revenues.
McDermott ended the quarter with a backlog of $2.0 billion, compared with a backlog of $2.2 billion in the previous-year quarter.
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