Time New York: Sun 24 Mar 07:30 am  |  Save 15% on H&R Block Online


McDermott (MDR) Provides Q1 Operational Update, Stock Jumps


McDermott International, Inc. MDR recently provided encouraging first-quarter 2018 operational update, while reaffirming its guidance for the whole year. The company thanked solid backlog conversation in its operational areas along with successful execution of its cost-saving plans for the positives. Following the news, the stock jumped 6.7% in the last session.

The company expects its top line for the Jan-Mar quarter to be in the range of $600-$610 million, much higher than the year-ago figure of $519.4 million. The Zacks Consensus Estimate shows revenues to be $590.8 million. Moreover, McDermott expects its EPS for the quarter to be in the range of 10-12 cents.

Per McDermott, cost saving efforts like the Fit2Grow initiative played crucial roles in this quarter. The Fit2Grow initiative alone helped the company in generating $15 million in savings. Moreover, McDermott expects its operating margin in the quarter to be in the range of 10-10.7%.

The company — anticipated to report first-quarter earnings around Apr 24 — expects its total backlog in the quarter to be around $3.4 billion, slightly lower than the Zacks Consensus Estimate of $3.8 billion.

We note that the company delivered a positive average earnings surprise of 247.1% in the last four quarters, thrice beating the Zacks Consensus Estimate.

2018 Guidance

McDermott reaffirmed its preliminary 2018 guidance, issued on Feb 21. The Houston, TX-based service provider expects its full-year revenues to be in the range of $3.1-$3.3 billion. Moreover, the company anticipates its EBITDA to be within the $340-$365 million range. Additionally, net income is anticipated to be approximately between $120 and $145 million. The company foresees its free cash flow to range within $195-$235 million. The EPS is estimated to lie between 42 cents and 52 cents.

Price Performance

McDermott has gained 1.7% in the past year against 14% fall of its industry.

Zacks Rank and Stocks to Consider

McDermott has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the oil and energy sector are CNOOC Limited CEO, Oasis Midstream Partners LP OMP and Continental Resources, Inc. CLR, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hong Kong-based CNOOC is an integrated energy company. Its revenues for 2018 are anticipated to improve 51.3% year over year, while its bottom line is expected to increase 80.8%.

Houston, TX-based Oasis Midstream is an integrated energy partnership. Its revenues for 2018 are anticipated to improve 29.3% from the prior-year quarter, while its bottom line is expected to increase 337.2%.

Oklahoma City, OK-based Continental Resources is an oil and gas exploration and production company. Its revenues for first-quarter 2018 are estimated to soar 55.7% from the year-ago quarter’s figure. For 2018, the bottom line is likely to be up 370.6%.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.