Boston, MA 03/05/2014 (wallstreetpr) – Analysts were not expecting such a result from McDermott International (NYSE:MDR). However ‘legacy’ issues and a delayed project caused the company to declare a loss.
The Earnings:
McDermott International (NYSE:MDR) reported revenues of $517 million, a drastic drop of almost 48% over the same period last year. Analysts were expecting the company to record revenues of at least $820.1 million. The company had reported revenues of $995.95 million for the same period last year. Earnings also were below the expectation of analysts. They were expecting the company to declare earnings of $0.15 per share; the company reported a net loss of $324 million translating to a loss of $1.37 per share for the quarter. For the same period last year, the company had reported earnings of $0.17 per share.
For the full year 2013, the company posted revenues of $2.8 million against $3.64 billion posted in 2012. The loss was $2.19 per share against $0.87 per share for the same period. Analysts had expected the company to report loss of $0.67 per share on revenues of $2.96 billion.
Company in change mode:
A new CEO, David Dickson, joined the company late in the quarter. He is in the process of streamlining operations as well as cutting costs. He aims to improve the long term profitability of McDermott International (NYSE:MDR). As part of the process, the company took a hit for charges and other write-offs. It wrote off $91 million in unapproved change orders affecting two projects. Another charge of $28 million was on account of a delayed project in Malaysia. The project backlog increased by $0.2 billion over the last quarter to close at $4.8 billion at the end of the fourth quarter.
Investors and analysts expect to see some operational improvements in the company before taking a call. The energy landscape is changing very rapidly and the current political situation presents a lot of opportunities for growth. The situation in Ukraine may have eased off a little bit but is yet to stabilize completely.
