McDermott (MDR) reported earnings on Mon 29 July 2019 (a/h)

 

McDermott misses by $0.16, misses on revs; lowers FY19 guidance; continues to pursue a sale of the remaining portion of its pipe fabrication business

Reports Q2 (Jun) loss of $0.07 per share, excluding non-recurring items, $0.16 worse than the S&P Capital IQ Consensus of $0.09; revenues rose 23.2% year/year to $2.14 bln vs the $2.25 bln S&P Capital IQ Consensus.

Co issues downside guidance for FY19, sees EPS of ~($0.32) vs. $1.59 S&P Capital IQ Consensus; sees FY19 revs of ~$9.5 bln vs. $10.02 bln S&P Capital IQ Consensus; Adjusted EBITDA of ~$725 mln.

The company today has updated its guidance for 2019 driven by four main factors: 1) the weaker than expected operating results for the second quarter of 2019; 2) the impact of reduced revenues and higher unallocated operating expenses due to slippage in certain new awards and customer changes to schedule on several projects; 3) changes in our assumptions about the expected performance of legacy CB&I projects in our NCSA operating segment; and 4) a shift from the fourth quarter of 2019 to 2020 in the assumed timing of remaining incentives on the Cameron LNG project. Full-year guidance assumes a sharp improvement in operating income in the fourth quarter of 2019, as the company builds momentum heading into 2020.

During the second quarter of 2019, McDermott completed the sale of the APP business, the distribution and manufacturing arm of its pipe fabrication business. McDermott continues to pursue a sale of the remaining portion of its pipe fabrication business.