Offshore oil and gas-focused engineering and construction firm McDermott International Inc. (NYSE:MDR) reported stellar first-quarter 2016 results. Improved execution of projects and operational profitability led to the outperformance.
The company reported adjusted earnings of 13 cents per share that handily beat the Zacks Consensus Estimate of 1 cent. The company had reported a loss of 2 cents in the year-ago quarter.
McDermott generated revenues of about $729 million in the quarter as against $550.5 million in the prior-year quarter. The top line also came in significantly above the Zacks Consensus Estimate of $670 million.
Total Expenses
Total costs and expenses increased 29% from $537.2 million in the year-ago quarter to about $693 million.
Backlog
At the end of the first quarter, McDermott had a backlog of $3,841.4 million as against $3,748.4 million a year ago. Of the total backlog, 71% is related to offshore operations, while the remaining 29% pertains to subsea operations.
Balance Sheet
Capital expenditure for McDermott was about $31.9 million during the quarter.
As of Mar 31, 2016, McDermott had cash and cash equivalents of $696.1million and long-term debt of approximately $815.6 million. This represents a debt-to-capitalization ratio of about 34.9%.
Recent News
On May 5, 2016, McDermott was awarded three distinct projects by a leading national oil company for the integrated engineering, procurement, construction, and installation (EPCI) services in multiple fields in the Arabian Gulf. These projects are expected to come online in the last quarter of 2017.
Zacks Rank and Key Stock Picks
Houston, TX-based McDermott currently holds a Zacks Rank #3 (Hold).
Some better-ranked players from the broader energy sector are Avangrid, Inc. (NYSE:AGR) , Superior Drilling Products, Inc. (NYSE:SDPI) and Spark Energy, Inc. (NASDAQ:SPKE) . All these stocks sport a Zacks Rank #1 (Strong Buy).
MCDERMOTT INTL (MDR): Free Stock Analysis Report
SPARK ENERGY (SPKE): Free Stock Analysis Report
SUPERIOR DR PRO (SDPI): Free Stock Analysis Report
AVANGRID INC (AGR): Free Stock Analysis Report
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