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McDermott jumps on big Q4 earnings surprise, Middle East contracts

Mar. 02, 2015 6:49 PM ETMcDermott International, Inc. (MDRIQ) StockBy: Carl Surran, SA News Editor6 Comments
  • McDermott (MDR) +21.8% AH after reporting a surprise Q4 profit and better than expected revenues, as well as strong revenue guidance for 2015.
  • MDR issues upside guidance for FY 2015, forecasting revenues of $3.3B-$3.6B vs. $2.79B analyst consensus estimate, and operating income of $25M-$50M; the company plans to lay off ~10% of its workers by the end of the year.
  • MDR expects 2015 cash savings from its restructuring, before costs, of ~$50M, with cash savings of $100M/year beginning in 2016.
  • At year-end 2014, contract backlog stood at $3.6B, down from $4B in Q3 and $4.8B at the end of 2013; 57% of the backlog is tied to subsea operations, and 43% to offshore operations.
  • Also announces contract wins for two separate offshore construction projects in the Middle East: a significant power supply system replacement contract by Saudi Aramco for the Marjan field offshore Saudi Arabia, and a project for new jacket, temporary deck and replacement umbilical by Qatar Petroleum for the North Field Alpha gas development offshore Qatar.

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