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Last Update: 27-Oct-11 09:51 ET
McDermott Guides Third Quarter Earnings Well Below Consensus
McDermott (MDR $9.59 -5.04) issued third quarter earnings guidance of $0.03 to $0.05, well below the $0.30 Capital IQ Consensus Estimates.
On the top line, the company is expecting to see revenue in the range of $870 million to $880 million versus the $896.6 million consensus.
McDermott has not traditionally provided, and does not expect to provide, specific earnings guidance, since its financial results can and do vary substantially quarter-to-quarter and year-to-year. However, in an effort to assist the financial community, the company is sharing its preliminary outlook for 2012.
Based upon current contracts in backlog, combined with an evaluation of the bids outstanding, company currently believes that attaining full-year 2012 revenues that are essentially equal to expected full-year 2011 revenues is achievable, but will be dependent upon, among other things, which bids are awarded to the company and the timing of the associated work.
While the company's long-term operating margin target range remains unchanged, it currently expects operating margins for 2012 to be in a range of 7% to 10%. This results from the company’s expectation for next year of substantially fewer marine barge workdays and a lower level of fabrication manhours in one segment, as compared to 2011.
With lower expected asset utilization as compared to 2011, the company currently expects to incur an increased level of costs in 2012 which will not be allocated to projects, resulting in lower consolidated operating income margins.
On the top line, the company is expecting to see revenue in the range of $870 million to $880 million versus the $896.6 million consensus.
McDermott has not traditionally provided, and does not expect to provide, specific earnings guidance, since its financial results can and do vary substantially quarter-to-quarter and year-to-year. However, in an effort to assist the financial community, the company is sharing its preliminary outlook for 2012.
Based upon current contracts in backlog, combined with an evaluation of the bids outstanding, company currently believes that attaining full-year 2012 revenues that are essentially equal to expected full-year 2011 revenues is achievable, but will be dependent upon, among other things, which bids are awarded to the company and the timing of the associated work.
While the company's long-term operating margin target range remains unchanged, it currently expects operating margins for 2012 to be in a range of 7% to 10%. This results from the company’s expectation for next year of substantially fewer marine barge workdays and a lower level of fabrication manhours in one segment, as compared to 2011.
With lower expected asset utilization as compared to 2011, the company currently expects to incur an increased level of costs in 2012 which will not be allocated to projects, resulting in lower consolidated operating income margins.
