MDR McDermott International Inc

   By Tess Stynes 
 

McDermott International Inc. (MDR) raised its 2016 earnings guidance as the engineering and construction company reported that its first-quarter loss narrowed amid better-than-expected revenue growth.

Shares rose 9.1%, to $4.45, in recent after-hours trading as adjusted earnings, excluding certain items, handily topped Wall Street estimates.

For the year, the company raised its adjusted per-share earnings estimate to six cents a share on revenue of $2.7 billion.

The company previously had projected that its 2016 earnings, excluding certain items, would be break-even on a per-share basis, on revenue of about $2.9 billion. At the time McDermott also had noted that weak commodity prices could pressure pricing and customer spending.

The Houston-based company builds infrastructure for offshore oil and gas producers. Like other companies serving the oil and gas sector, McDermott has been cutting costs as demand from its customers has weakened due to weak oil prices.

"Overall, we have had a very positive start to the year," Chief Executive David Dickson said in prepared remarks Thursday.

In the latest quarter one of its customers, Brazilian state-controlled oil company Petroleo Brasileiro SA (PBR, PETR3.BR, PETR4.BR), or Petrobras, terminated the charter of one of McDermott's vessels, resulting in a write-down reflecting a lack of demand for the vessel in its current pipeline, Mr. Dickson said.

"Despite the current market conditions, we see continued bidding activity in our core markets and a steady level of opportunities in our revenue pipeline," Mr. Dickson stated.

Over all, McDermott reported a loss of $2.2 million, or a penny a share, compared with a year-earlier loss of $14.5 million, or six cents a share. Excluding asset write-downs, restructuring-related charges and other items, per-share earnings were 13 cents, compared with an adjusted per-share loss of two cents. Revenue increased 32%, to $729 million.

Analysts polled by Thomson Reuters expected per-share profit of a penny and revenue of $701 million.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

May 05, 2016 17:39 ET (21:39 GMT)

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