McDermott reports another steep loss
Houston construction and engineering firm McDermott International posted another steep loss during the third quarter amid cost overruns on multiple projects, including two liquefied natural gas plants near Houston.
In a Monday filing with the U.S. Securities and Exchange Commission, McDermott reported a nearly $1.9 billion loss, compared to a $2 million profit during the same period a year earlier. Revenues fell about 9 percent to $2.1 billion from $2.3 billion of revenue during the third quarter of 2018.
The third quarter figures translated into a loss per share of $10.37. McDermott missed Wall Street expectations of $2.46 billion of revenue and a loss per share of 72 cents.
In its SEC filing, the company blamed the loss on $1.5 billion in
accounting charges to reflect the lower value of its business, most of which were related to its recent stock price plunge and cost overruns on at least six projects from the company’s North, Central and South America division. McDermott’s third- quarter earnings mark four consecutive quarters of losses.
In September, market rumors that the company had retained a Chapter 11 bankruptcy advisory firm sent the company’s stock falling from $5.88 per share to $1.58 per share over two days. The company’s stock closed at $1.73 per share before the third quarter earnings were reported.
During the third quarter, McDermott reported cost overruns and delays for its engineering, procurement and construction work on the Cameron LNG export terminal in
Louisiana, Freeport LNG in Texas, power plant projects, various petrochemical projects and an offshore oil project for Mexico’s Petroleos Mexicanos, or Pemex.
McDermott did not schedule an investors call to discuss the results, which is a widely adopted practice for publicly traded companies.
Founded in 1923, McDermott provides design, engineering and construction services to petrochemical plants, liquefied natural gas plants and offshore oil and natural gas facilities.
The company has more than 32,000 employees in 54 nations. The Houston company posted a $2.7 billion loss on $6.7 billion of revenue in 2018.
McDermott’s third-quarter earnings mark four consecutive quarters of losses.