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Net income for the quarter increased 19% to $177.54 million from $149.37 million in the previous year. On a per share basis, earnings advanced to $0.77 from $0.66 in the second quarter of 2007. On average, nine analysts polled by First Call/Thomson Financial expected earnings of $0.77 per share for the quarter.
Second-quarter revenues advanced 26.4% to $1.79 billion from $1.42 billion in the prior-year quarter. Six analysts had a consensus revenue estimate of $1.85 billion.
Revenue from the Offshore Oil & Gas Construction segment climbed 50.4% to $872.27 million, aided by higher activities in the Middle East and Asia Pacific regions. Second-quarter revenue from the Power Generation Systems segment increased 3.6% to $698.07 million, helped by higher retrofit activity of existing facilities, replacement parts and service and replacement nuclear steam generators. Government Operations segment revenue grew 34.6% to $225.76 million, mainly due to higher volumes and procurement activity in the manufacture of nuclear components for certain Government programs.
Quarterly operating income increased 27.1% to $231.12 million from $181.79 million in the year-ago quarter.
Commenting on the results, Bruce Wilkinson, Chairman of McDermott, said "The strong project execution in our Power Generation Systems segment, as well as its robust parts and service offerings, coupled with growth in the Government Operations segment led to the Company's overall strong performance."
On June 13, Analyst John B Rogers of DA Davidson maintained his 'buy' rating on McDermott. The analyst indicated that McDermott's proposed joint venture with China Shipbuilding Corp. would expand the company's foothold in China and would fit well with its existing capabilities with fixed platforms. The rising oil prices have strengthened the demand potential, the analyst added.
Amongst others in the industry, Irving, Texas-based Fluor Corp. (FLR | Quote | Chart | News | PowerRating) said its second quarter earnings more than doubled from last year, helped by strong growth in its oil & gas and power segments as well as a gain from sale of stake in a joint venture. Another engineering services provider Foster Wheeler Ltd. (FWLT | Quote | Chart | News | PowerRating) last week reported a 124% increase in second quarter profit, helped by a 43% rise in revenues and a net asbestos-related gain.
McDermott's year-to-date net income dropped 2.18% to $300.73 million and earnings per share decreased 3% to $1.31. Revenues for the six-month period, however, increased 1.67% to 3.24 billion from the corresponding period last year.
MDR ended Monday's trading up 1.33% at $41.88, on a volume of about 3.57 million shares. During the extended session, McDermott lost 5.21% to trade at $39.70. The stock has been moving in a range of $34.32 to $67.14 for the past one year, with a three-month average volume of about 2.42 million shares.
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