Finance News

McDermott Reports First Quarter 2019 Financial and Operational Results

McDermott International, Inc. reports revenues of $2.2 billion and a net loss of $(70) million, or $(0.39) per diluted share, for the first quarter of 2019. Excluding restructuring, integration and transaction costs, as outlined in an accompanying table, the adjusted net income for the first quarter of 2019 was $3 million, or $0.02 per diluted share.

"With our steady progress on both Cameron and Freeport during the first quarter of 2019, McDermott has taken important steps to demonstrate disciplined execution on these projects," said David Dickson, President and Chief Executive Officer of McDermott. "The recent introduction of feed gas at Cameron was a major milestone in the commissioning of Train 1 and is the precursor for the production of liquefied natural gas. With the imminent completion of Train 1, as well as the initial work to commission Freeport Train 1, we are increasingly confident that the two facilities will come fully on line in 2020 as world-class LNG producers. Further, we were pleased to report that we had no material increase in cost estimates on either project in the first quarter, and we continue to progress our commercial discussions relating to Cameron."

"As for the company's performance in the first quarter of 2019, the net loss of $(70) million was largely the result of $73 million of restructuring, integration and transaction costs, which also impacted operating income, offsetting otherwise sound performance across our operating segments and a sequential-quarter reduction in selling, general and administrative expenses," said Dickson.

"More broadly, the company continues to exhibit commercial success in a steadily improving market. In particular, McDermott reported a book-to-bill ratio of 3.0x, a new award total of $6.7 billion and a 41% sequential-quarter improvement in backlog. Included in our orders this quarter were the Golden Pass LNG project in North America, several offshore projects in the Middle East, the BP Tortue project and Cassia-C project – both of which converted from FEED work to EPCI – and the Woodside Scarborough FEED award, which is a revenue synergy and includes a mechanism for conversion to an EPCI contract pending FID by the customer. The level of awards in the first quarter demonstrates customer confidence in the combined company, which is further supported by our $91 billion revenue opportunity pipeline. Additionally, our backlog as of the end of the first quarter gives us visibility for about 80% of our expected total revenues for 2019 – and more than $9 billion for 2020 and thereafter."

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