McDermott International Misses Where it Counts

McDermott International (NYSE: MDR  ) reported earnings on Nov. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), McDermott International beat expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share expanded significantly.

Margins expanded across the board.

Revenue details
McDermott International reported revenue of $1.03 billion. The 14 analysts polled by S&P Capital IQ hoped for revenue of $985.0 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $879.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.21. The 17 earnings estimates compiled by S&P Capital IQ predicted $0.24 per share. GAAP EPS of $0.21 for Q3 were 320% higher than the prior-year quarter's $0.05 per share. (The prior-year quarter included $0.01 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 13.5%, 480 basis points better than the prior-year quarter. Operating margin was 8.5%, 520 basis points better than the prior-year quarter. Net margin was 4.9%, 370 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.02 billion. On the bottom line, the average EPS estimate is $0.26.

Next year's average estimate for revenue is $3.60 billion. The average EPS estimate is $0.97.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,295 members out of 1,327 rating the stock outperform, and 32 members rating it underperform. Among 298 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 292 give McDermott International a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on McDermott International is outperform, with an average price target of $15.92.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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