McDermott Profit Beats Expectations

McDermott reported better-than-expected second-quarter and half-year 2016 earnings results, despite revenue drop and vessel-related impairment charges.

The Houston-based company posted quarterly net income of $20.7 million, or $0.07 per fully diluted share, compared to net income of $11.5 million, or $0.04 per fully diluted share same time last year. Analysts had the offshore EPCI player at 2 cents per share for the quarter.

Adjusted net income, before restructuring charges, came to 8 cents per share, versus 9 cents per share in the corresponding period in 2015.

For the first six months ended June 30, 2016, McDermott swung to $18.5 million profit from $3 million loss at the end of first half of 2015.

Adjustments in the second quarter 2016 included $2.5 million restructuring costs, and $8.9 million during the six months. Adjustments for the six months ended June 30, 2016 also included a $32.3 million impairment of the Agile vessel following Petrobras charter termination in May 2016.

In the second quarter of 2016 McDermott has generated revenues of $706 million, down from $1.04 billion in the prior-year quarter. According to the company, revenues were mainly associated with the INPEX Ichthys and Saudi Aramco’s Marjan GOSP and LTA II lump sum projects. Six-months revenues also declined some $161 million from the prior-year comparable period.

Order intake in the second quarter of 2016 totaled $1.2 billion, including the contract with Pemex Abkatun-A2 project and three separate contracts with Saudi Aramco.

As of June 30, 2016, McDermott’s backlog was $4.4 billion, of which approximately 80 percent is related to offshore operations and approximately 20 percent is related to subsea operations.

The company said it had bids outstanding and target projects of approximately $16.7 billion in projects that it expects to be awarded in the market through June 30, 2017.

Subsea World News Staff

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