McDermott nets $2M profit, to sell off 2 units
Several companies based in the Houston area, from petrochemical and energy giants to smaller players, reported their quarterly earnings on Tuesday. McDermott to sell two lines of business
Houston-based McDermott International said Tuesday it plans to sell its storage tank and U.S. pipe fabrication businesses for more than $1 billion next year.
The decisions come from a strategic review conducted after the energy engineering and construction company acquired The Woodlands-based CB&I earlier this year. The two business units account for more than 5,300 workers out of McDermott’s global workforce of about 40,000.
McDermott plans to put the proceeds toward debt reduction.
“The tank business in particular is known as a world leader in its served markets,” McDermott Chief Executive David Dickson said of the CB&I tank operation. “Our intent would be to seek the kinds of owners who would value the significant long-term growth potential of each business and who would thus provide attractive prospects for employees and customers.”
McDermott posted a small $2 million net profit for the third quarter.
In its earnings, McDermott also gave updates on two of the largest liquefied natural gas export projects it is building along the Gulf Coast, both of which have faced several delays.
The Sempra Energy-owned Cameron LNG project in Louisiana near the Texas state line is expected to see its first phase completed in the second quarter of 2019 and be fully up and running in 2020.
Likewise, the Freeport LNG
project south of Houston at Quintana would start coming online in the fall of 2019 and be fully operating in mid-2020.
Baker Hughes swings to profit
Houston-based Baker Hughes reported a small $13 million profit in the third quarter that returned the oil field services provider to profitability after losses last quarter and in the third quarter of 2017.
Baker Hughes, a GE company, also posted a small gain in quarterly revenue of $5.67 billion that was up 7 percent from last year and 2 percent from the second quarter.
The overhanging question is when Baker Hughes will separate itself from financially struggling General Electric, which acquired a majority stake in the company last year.
GE reported a nearly $23 billion loss Tuesday, primarily from an accounting charge after the financial collapse of its GE Power business. But Baker Hughes CEO Lorenzo Simonelli has repeatedly emphasized that the company operates independently and is well positioned with or without GE’s ownership.
He touted an improving environment for the oil and gas sector worldwide.
“We are encouraged by the improved outlook for the macro environment,” Simonelli said. “We expect both the North American and international markets to grow in 2019 as customers increase spending and overall rig and well counts grow. The offshore market is the strongest it has been in many years.”
Earnings increase for LyondellBasell
LyondellBasell increased its third-quarter earnings, reporting a profit of $1.1 billion, or $2.85 per share, with its U.S. plastics segment rising 21 percent.
That compares with a profit of $1.06 billion, or $2.67 per share, over the same period last year.
Overall, the Houstonbased company saw improvements in four of its six segments, led by its plastics segment in the Americas, which earned $572 million, up from $473 million the prior-year quarter. The higher profit margins in the segment were in part due to the third-quarter 2017 impact from Hurricane Harvey.
Polyolefin results increased by about $100 million, driven by spread improvements in polyethylene and polypropylene.
Overseas, the company's plastics segment earned $141 million, down from $367 million the prior-year quarter. The company blamed the drop on planned plant maintenance and higher feed costs.
LyondellBasell saw improvements in its intermediates and derivatives segment, which earned $431 million, compared with $329 million the prior-year quarter.
In August, the company completed the acquisition of A. Schulman and launched its advanced polymer solutions segment.
Huntsman says loss related to spinoff
Huntsman Corp. on Tuesday reported a net loss of $8 million in the third quarter, compared with a profit of $179 million in the prior-year period and $623 million in the prior quarter.
The company's results were in line with Zacks Consensus Estimate.
Huntsman said the net loss is due to accounting charges related to the spinoff last year of Venator Materials, its business of titanium dioxide used to make pigments. Huntsman has a 53 percent stake in the new company, but it plans to sell that off in the years ahead.
Huntsman, a specialty chemicals maker based in the The Woodlands, said its revenue increased 13 percent year over year, from $2.16 billion in 2017 to $2.44 billion in 2018.
Sales of polyurethanes, used in foams, insulation, textiles and other products, increased to $1.35 billion, up from just over $1.2 billion a year earlier.
The company said it remains on track to deliver on its 2020 targets.
Net income declines for sand supplier
Frac sand miner and supplier Hi-Crush Partners saw its profit fall in the third quarter compared with last year.
The Houston-based company posted earnings of $26.5 million, or 30 cents a share, for the third quarter ending Sept. 30. That is down 10.9 percent compared with the $29.8 million, or 33 cents a share, it earned in the same period of 2017.
Analysts expected HiCrush to earn 29 cents a share.
The decline in profit came despite revenue increasing 27.7 percent in the third quarter year over year.
The company sold nearly 2.8 million tons of sand in the third quarter, an increase of nearly 13 percent compared with the 2.5 million tons it sold in the same period of 2017.