It has been about a month since the last earnings report for McDermott International, Inc. . Shares have lost about 19.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Fourth Quarter 2016 Results
McDermott International reported earnings of $0.02 per share in fourth-quarter 2016, which compared favorably with the Zacks Consensus Estimate of a loss of $0.01. Improved execution of projects and operational profitability led to the outperformance. However, the bottom line deteriorated from the year-ago quarter’s earnings.
McDermott generated revenues of about $642 million in the quarter down from $667 million in the prior-year quarter. The top line, however, came in above the Zacks Consensus Estimate of $616 million.
Total Expenses
Total costs and expenses decreased 15.7% from $2,957.6 million in the year-ago quarter to about $2,493.7 million.
Backlog
At the end of the fourth quarter, McDermott had a backlog of $4,312.9 million compared with $4,231.4 million a year ago. While 84% of the total backlog is related to offshore operations, the remaining 16% pertains to subsea operations.
Capital Expenditure and Balance Sheet
Capital expenditure for McDermott was about $30.7 million during the quarter.
As of Dec 31, 2016, the company had cash and cash equivalents of $595.9 million and long-term debt of approximately $704.4 million. This represents a debt-to-capitalization ratio of about 30.6%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There has been one move upward in the last two months. In the past month, the consensus estimate has shifted lower by 83.3% due to these changes.
VGM Scores
Currently, McDermott's stock has a nice score of 'B', on both growth and momentum front. Charting a somewhat similar path, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Why Is McDermott (MDR) Down 19.1% Since the Last Earnings Report?
It has been about a month since the last earnings report for McDermott International, Inc. . Shares have lost about 19.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Fourth Quarter 2016 Results
McDermott International reported earnings of $0.02 per share in fourth-quarter 2016, which compared favorably with the Zacks Consensus Estimate of a loss of $0.01. Improved execution of projects and operational profitability led to the outperformance. However, the bottom line deteriorated from the year-ago quarter’s earnings.
McDermott generated revenues of about $642 million in the quarter down from $667 million in the prior-year quarter. The top line, however, came in above the Zacks Consensus Estimate of $616 million.
Total Expenses
Total costs and expenses decreased 15.7% from $2,957.6 million in the year-ago quarter to about $2,493.7 million.
Backlog
At the end of the fourth quarter, McDermott had a backlog of $4,312.9 million compared with $4,231.4 million a year ago. While 84% of the total backlog is related to offshore operations, the remaining 16% pertains to subsea operations.
Capital Expenditure and Balance Sheet
Capital expenditure for McDermott was about $30.7 million during the quarter.
As of Dec 31, 2016, the company had cash and cash equivalents of $595.9 million and long-term debt of approximately $704.4 million. This represents a debt-to-capitalization ratio of about 30.6%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There has been one move upward in the last two months. In the past month, the consensus estimate has shifted lower by 83.3% due to these changes.
McDermott International, Inc. Price and Consensus
McDermott International, Inc. Price and Consensus | McDermott International, Inc. Quote
VGM Scores
Currently, McDermott's stock has a nice score of 'B', on both growth and momentum front. Charting a somewhat similar path, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.