McDermott, an engineering, procurement, construction and installation company, returned to profit in the first quarter of 2017 despite decrease in revenues.
The company on Tuesday posted earnings attributable to McDermott stockholders of $21.9 million for the first quarter of 2017, compared to a $2.2 million net loss in the corresponding period of 2016.
There were no adjustments from GAAP for the $21.9 million net income in 1Q 2017, compared to an adjusted net income of $36.3 million, excluding restructuring charges of $6.4 million and impairment charges of $32.3 million, in the prior-year first quarter.
During the first quarter 2017, the company recorded revenues of $519.4 million, a decrease of some $210 million when compared to the prior-year first quarter and revenues of $729 million.
According to McDermott, the key projects driving revenue for the first quarter of 2017 were the ONGC Vashishta, Saudi Aramco Long Term Agreement II, KJO Hout and INPEX Ichthys projects. The decrease from the prior-year first quarter is primarily due to reduced activity on Ichthys as the project progresses through the installation phase.
As of March 31, 2017, the company’s backlog was $3.9 billion, of which approximately 85% was related to offshore operations and approximately 15% was related to subsea operations. The end of March backlog was lower compared to $4.3 billion backlog at December 31, 2016.
The company’s full year 2017 guidance for revenues remained unchanged totaling $3.2 billion while its net income guidance increased from $80 million to $120 million.
The company explained that the increase in 2017 guidance is mainly attributable to increased profitability and cash flow due to closeouts from project execution in the first quarter of 2017, as well as customer driven change orders awarded this quarter.
Offshore Energy Today Staff