Engineering and construction firm McDermott International Inc. (MDR) said Monday after the markets closed that its second quarter profit fell 18% from last year, hurt mainly by costs related to the spin-off of its Babcock & Wilcox Co. business unit.
The Houston, Texas-based company reported net income for the second quarter of $76.0 million or $0.32 per share, compared to $92.6 million or $0.40 per share for the year-ago quarter.
The latest quarter results include about $66.2 million or $0.28 per share in costs related to the spin-off of Babcock & Wilcox that was eventually spun-off to McDermott shareholders on July 30.
On average, 18 analysts polled by Thomson Reuters expected the company to earn $0.43 per share for the second quarter. Analysts' estimates typically exclude special items.
Adjusting McDermott's consolidated results for the spin-off of Babcock & Wilcox and the related costs, pro forma net income for the second quarter was $81.3 million or $0.35 per share, compared to $34.4 million, or $0.15 per share in the prior year quarter.
McDermott's pro-forma operating income for the second quarter rose 84% to $102.7 million from $55.7 million a year ago, due to improved project performance, mainly in its Middle East operations.
Revenue for the second quarter fell 15% to $1.33 billion from $1.56 billion in the same quarter last year. Fifteen analysts had a consensus revenue estimate of $0.43 per share for the second quarter.
Pro forma revenue for the second quarter declined 23% to $645.07 million from $832.93 million in the second quarter of last year.
"McDermott's performance in the second quarter of 2010 was an excellent beginning as the company moves forward post-spin," said Stephen Johnson, President and Chief Executive Officer of McDermott.
After completing the spin-off of its power generation systems and government operations segments through the distribution of the shares of Babcock & Wilcox to McDermott shareholders, McDermott is now a stand alone engineering, procurement, construction and installation company focused on the offshore upstream oil and gas market worldwide.
McDermott's pro forma backlog stood at $4.3 billion at the end of the second quarter, compared to $4.2 billion at the end of the previous quarter and $4.7 billion a year ago.
Following the spin-off, Babcock & Wilcox is now a separate, publicly traded company and McDermott does not retain any ownership interest in the company. The common stock of Babcock & Wilcox commenced regular day trading on the New York Stock Exchange on August 2 under the symbol "BWC."
Fluor Corp. (FLR), another engineering and construction firm, last month reported lower second quarter profit, hurt by weakness in its oil & gas business unit. However, the company's quarterly earnings per share came in above analysts' expectations as did its quarterly revenue. The company also raised the lower end its full year 2010 earnings outlook.
McDermott shares closed Monday's regular trading session at $13.83, up 25 cents or 1.84%. The stock is currently losing 2 cents 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.