McDermott International Announces First Quarter Results (USA)

McDermott International, Inc. reported income from continuing operations of $68.8 million, or $0.29 per diluted share, for the 2011 first quarter. The results of the 2011 first quarter compare to income from continuing operations of $51.6 million, or $0.22 per diluted share, in the corresponding period of 2010.

The results of McDermott’s charter fleet business and The Babcock & Wilcox Company (“B&W”), which was spun-off to McDermott shareholders on July 30, 2010, are excluded from both periods and are classified as discontinued operations. Weighted average common shares outstanding on a fully diluted basis were approximately 236.7 million and 234.8 million in the quarters ended March 31, 2011 and March 31, 2010, respectively.

McDermott’s revenues for the 2011 first quarter were $899.2 million, an increase of 78 percent, compared to $504.9 million in the corresponding period of 2010. The year-over-year increase was primarily due to significant increases in the Asia Pacific and Middle East segments as a result of higher marine activity on large engineering, procurement, construction and installation (“EPCI”) projects, partially offset by lower revenues in the Atlantic segment.

The Company’s operating income was $100.3 million in the 2011 first quarter, compared to $73.2 million in the 2010 first quarter. The year-over-year increase was due to a 148 percent increase in the Middle East segment, partially offset by reduced levels of operating income in the Asia Pacific and Atlantic segments. Although higher revenues provided an overall increase in operating income, the improvement was moderated as McDermott recognized significantly less income from change orders, settlements and close-outs in the first quarter of 2011 as compared to the 2010 period.

“McDermott delivered solid results in the 2011 first quarter which represents a positive start to the year,” said Stephen M. Johnson, Chairman of the Board, President and Chief Executive Officer of McDermott. “The offshore EPCI markets we serve continue to be robust, our backlog remains strong, we’ve executed well and our healthy balance sheet provides a firm foundation to pursue growth.”

The Company’s other expense for the first quarter of 2011 increased to $5.0 million, from $1.1 million in the first quarter of 2010, primarily due to non-cash foreign currency expense.

At March 31, 2011, the Company’s backlog was $4.8 billion, compared to $4.1 billion and $5.0 billion at March 31, 2010 and December 31, 2010, respectively.

Balance Sheet Summary

As of March 31, 2011, McDermott reported total assets of almost $2.6 billion. Included in this amount was approximately $741.4 million of cash, restricted cash and investments. Net working capital, calculated as current assets less current liabilities, was $483.8 million. Additionally, total equity was over $1.6 billion, or 62% of total assets, with total debt of $65.1 million.

Discontinued Operations

For the first quarter of 2011, McDermott recorded net income from discontinued operations of $1.7 million, or $0.01 per diluted share, derived from its charter fleet business which is held for sale. Including the results of discontinued operations, total net income attributable to McDermott was $70.4 million, or $0.30 per diluted share, for the 2011 first quarter.

About the Company

McDermott is a leading engineering, procurement, construction and installation (“EPCI”) company focused on executing complex offshore oil and gas projects worldwide. Providing fully integrated EPCI services for upstream field developments, the Company delivers fixed and floating production facilities, pipelines and subsea systems from concept to commissioning. McDermott’s customers include national and major energy companies. Operating in approximately 20 countries across the Atlantic, Middle East and Asia Pacific, the Company’s integrated resources include more than 15,000 employees and a diversified fleet of marine vessels, fabrication facilities and engineering offices. McDermott has served the energy industry since 1923.

[mappress]
Source: mcdermott,May 11, 2011;