Engineering and construction firm McDermott International Inc. (MDR) said Monday after the markets closed that its fourth quarter profit more than doubled from a year ago despite lower revenue, as there was strong improvement in operating profit at its offshore oil & gas construction segment.
The Houston, Texas-based company reported net income for the fourth quarter of $98.7 million or $0.42 per share, compared to $43.0 million or $0.19 per share for the year-ago quarter.
Operating income for the quarter rose 37% to $122.8 million from $89.7 million in the prior year quarter.
Revenues for the fourth quarter fell 12% to $1.46 billion from $1.66 billion in the same quarter last year.
Fourth quarter revenues in the company's offshore oil & gas construction segment declined 9% to $770.6 million from $848.3 million a year ago. Segment income for the quarter jumped to $97.6 million from $14.9 million in the prior year quarter, with major contributions from the Middle East and Asia Pacific regions.
Revenues in the company's power generation systems segment fell 28% to $435.2 million in the fourth quarter from $605.5 million in the fourth quarter of last year, mainly due to reduced activity on customers' major capital projects, including new power plant construction and retrofits of existing power plants. Segment income dropped 55% to $21.7 million from $48.7 million a year earlier.
Fourth quarter revenues in the company's government operations segment grew 20% to $253.8 million from $212.2 million in the year-ago quarter. Segment income declined 11% to $31.5 million from $35.2 million a year earlier.
McDermott ended the quarter and the year with a consolidated backlog of $8.1 billion, compared to $9.8 billion a year ago and $8.5 billion at the end of the prior quarter.
"We are pleased with our results for the final quarter of 2009. These results highlight the resiliency of our businesses in what still remains a challenging economic environment. Despite about $150 million of our Offshore Oil & Gas Construction segment's revenues coming from zero margin projects, this segment delivered strong segment income, exceeding our expectations," said John A. Fees, Chief Executive Officer of McDermott.
For the full year 2009, the company reported net income of $387.1 million or $1.66 per share, compared to $429.3 million or $1.86 per share for the full year 2008.
Revenues for the full year 2009 fell 6% to $6.19 billion from $6.57 billion the prior year.
McDermott also said it is making substantial progress on the previously announced spin-off of The Babcock & Wilcox Co. and that it expects to file a first draft of the Form 10 registration statement later this month.
In December, McDermott announced plans to separate its operating subsidiaries, The Babcock & Wilcox Co. and J. Ray McDermott, S.A. into two independent, publicly traded companies.
Babcock & Wilcox is a technology innovator in power generation and is a specialty manufacturer of nuclear components. It supplies nuclear components to the U.S. government's defense programs and manages nuclear facilities and environmental management sites.
J. Ray is an engineering, construction and installation company focused on the offshore upstream oil and gas market.
Following completion of the separation, McDermott International plans to be renamed J. Ray McDermott, S.A., and shareholders will own 100% of two separate companies: Babcock & Wilcox and J. Ray. The deal is expected to be completed in nine to 12 months.
Babcock & Wilcox expects to list its shares on the New York Stock Exchange, while J. Ray will retain the McDermott "MDR" listing on the NYSE.
Among others in the industry, Fluor Corp. (FLR) last week reported fourth quarter profit that fell 22% from a year ago, hurt by a higher effective tax rate and weak performance at its oil & gas and global services segments. The company also lowered its full year 2010 earnings outlook.
McDermott shares, which have traded in a range of $9.10 to $27.89 over the past year, closed Monday's regular trading session at $23.82, up 97 cents or 4.25%. The stock is currently losing 65 cents or 2.73% in after hours trading.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.