McDermott International Badly Misses Estimates; Stock Plunges (MDR)

Engineering firm

released its fiscal second-quarter earnings results after the closing bell on Monday. Both the company's earnings per share and revenue badly missed Wall Street consensus. In late trade, the stock was last down almost 15 percent to $7.43.

“As a management team, we are taking immediate and decisive actions to correct the weakness we have experienced in our project bidding and execution,” said Stephen M. Johnson, Chairman of the Board, President and Chief Executive Officer of McDermott. “We are driving a more disciplined culture within the Company, and we expect our operating leadership change announced separately today will add focus and urgency to our intentions. Although these problematic projects are expected to require some time to fully work through the system, the initiatives listed below reinforce our commitment to delivering an adequate return on our investors' capital.”

McDermott reported a net loss of $149.4 million or $0.63 per share, compared to net income of $52.7 million or $0.22 per share, in last year's second-quarter. This came up well short of Wall Street consensus EPS estimates calling for a profit of $0.03. Revenue in the quarter fell to $647.25 million from $889.25 million last year. This also missed Wall Street consensus revenue estimates of $757.87 million by a wide margin. According to management, the weakness was concentrated in the Middle East and Asia Pacific regions.