The 10-second takeaway
For the quarter ended March 31 (Q1), McDermott International whiffed on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share dropped.
Margins improved across the board.
McDermott International notched revenue of $727.7 million. The 14 analysts polled by S&P Capital IQ hoped for revenue of $840.9 million on the same basis. GAAP reported sales were 19% lower than the prior-year quarter's $899.2 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.25. The 18 earnings estimates compiled by S&P Capital IQ anticipated $0.15 per share. GAAP EPS of $0.26 for Q1 were 13% lower than the prior-year quarter's $0.30 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.
For the quarter, gross margin was 17.9%, 100 basis points better than the prior-year quarter. Operating margin was 11.5%, 80 basis points better than the prior-year quarter. Net margin was 8.6%, 80 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $870.4 million. On the bottom line, the average EPS estimate is $0.21.
Next year's average estimate for revenue is $3.54 billion. The average EPS estimate is $0.89.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,300 members out of 1,332 rating the stock outperform, and 32 members rating it underperform. Among 321 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 315 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 $17.06.
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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. 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.