McDermott International Inc. (MDR) swung to a surprise
second-quarter profit as the engineering and construction company
posted better-than-expected revenue growth.
For the year, the company raised its operating earnings outlook
to $50 million to $70 million, from its previous view for $25
million to $50 million, which McDermott attributed to improved
execution and its focus on cost management.
McDermott slightly lowered its revenue guidance by $300 million
and now expects $3 billion to $3.3 billion.
The Houston-based engineering and construction company builds
infrastructure for offshore oil and gas producers.
Like other companies serving the oil and gas sector, McDermott
has been cutting costs as it grapples with pressures from its
customers to charge them less. During the first-quarter McDermott
said that it cut roughly 1,700 workers worldwide, including 475
employees and more than 1,200 contractors that worked in
McDermott's fabrication yards.
Chief Executive David Dickson said in prepared remarks on Monday
said that while the timing of new orders remains volatile as
commodity prices remain low, the company continues to win contracts
in its key markets, including a new project for Saudi Aramco and
two new projects in the Americas.
"Additionally, we remain disciplined in bidding new projects and
continue to actively manage our cost structure," Mr. Dickson
stated.
Overall, McDermott reported a profit of $11.5 million, or four
cents a share, compared with a year-earlier loss of $7.4 million,
or three cents a share. Excluding items such as
restructuring-related charges, asset sales losses and write-downs,
per-share earnings were 12 cents.
Revenue more than doubled to $1.05 billion.
Analysts polled by Thomson Reuters expected per-share loss of
five cents and revenue of $830 million.
As of June 30, the company's backlog reached $3.13 billion,
compared $3.75 billion as of March 31.
Write to Tess Stynes at tess.stynes@wsj.com
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