Engineering and construction firm McDermott International Inc. (MDR) Monday said its second quarter profit declined by 48% from last year, due to a lower level of activity in the Power Generation Systems segment, partially offset by increased revenues in the Government Operations segment. The company's quarterly earnings, however, exceeded analysts' expectations.
The Houston, Texas-based company reported net income attributable to McDermott of $92.6 million or $0.40 per share for the second quarter, compared to $177.5 million or $0.77 per share in the prior year quarter. On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.37 per share for the second quarter. Analysts' estimates typically exclude one-time items.
Operating income for the second quarter decreased to $147.7 million from $231.1 million in the year-ago quarter.
Second quarter revenues declined to $1.57 billion from $1.79 billion in the same quarter last year, essentially on lower level of activity in the Power Generation Systems segment, partially offset by increased revenues in the Government Operations segment. Twelve analysts had a consensus revenue estimate of $1.59 billion for the second quarter.
Revenues from Offshore Oil & Gas Construction segment dropped to $832.7 million from $872.3 million a year ago, as higher revenues in the Middle East region were more than offset by reduced levels in other regions.
Revenues in the Power Generation Systems segment were $471.6 million for the second quarter, down from $698.1 million in the second quarter of 2008, due to reduced activity on customers' major capital projects including new power plant construction and retrofits of existing power plants.
Government Operations segment, however, fetched revenues of $261.4 million, up from $225.8 million over a year earlier, due to activities in the manufacture of nuclear components and nuclear fuels for certain U.S. Government programs, including revenues from Nuclear Fuel Services acquired in December 2008.
Total costs and expenses for the second quarter declined to $1.43 billion from $1.57 billion in the prior year quarter.
At June 30, 2009, McDermott's consolidated backlog was $9.5 billion, down from $9.8 billion at June 30, 2008.
For the first-half of 2009, McDermott posted net income attributable to McDermott of $170.2 million or $0.73 per share, compared to $300.7 million or $1.31 per share in the year-ago period.
Revenues for the year-to-date period decreased to $3.06 billion from $3.24 billion in the previous year period.
McDermott closed Monday's regular trading session at $21.32, down 20 cents on a volume of 3.02 million shares. In after-hours, the stock gained 18 cents.
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