Back to top

Analyst Blog

Engineering and construction firm McDermott International (MDR - Analyst Report) reported weak first-quarter 2013 profits, owing to operating losses in some regions and increased expenses. This was partially offset by stronger operating income in Asia Pacific region.

Earnings per share from continuing operations came in at 9 cents, behind the Zacks Consensus Estimate of 15 cents.

Moreover, the Texas-based engineering-to-project management service provider’s per share profit was significantly lower than 25 cents earned in the first quarter of 2012. The quarter’s result was negatively influenced by lesser asset utilization and project activity.

McDermott generated revenues of $807.5 million in the quarter, up 11.0% from the first quarter of 2012 and also ahead of our expectation of $733.0 million. Increased fabrication activity in the Atlantic region and better operations in the Middle East and Asia Pacific regions boosted the company’s results.

On a reported basis, McDermott registered operating income of $53.0 million (down 33.8% year over year) during the quarter. Total costs and expenses also increased 16.5% from the corresponding period last year to $750.3 million.


At the end of the first quarter of 2013, McDermott had a backlog of $5,298.0 million, compared with $5,806.6 million a year ago. As of Dec 31, 2012, the backlog was $5,067.2 million.

Balance Sheet

As of Mar 31, 2013, McDermott had cash/cash equivalents of $461.5 million and long-term debt (including current maturities) of approximately $101.2 million (representing a debt-to-capitalization ratio of approximately 4.9%).

Zacks Rank

McDermott currently retains a Zacks Rank #4 (Sell).

However, there are some other energy firms that offer value and are worth buying now. These include EPL Oil & Gas Inc. with a Zacks Rank #1 (Strong Buy), and McMoRan Exploration Co. and Stone Energy Corporation (SGY - Analyst Report) with a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%