(Dow Jones) McDermott International Inc.’s (MDR) first-quarter profit slid 11% due to lower activity in the Asia Pacific region, though cost controls helped the company sail past earnings expectations.
Shares jumped 8% to $10.68 after hours on the stronger-than-expected profit. The stock was off 56% over the past year through Thursday’s close.
McDermott’s bottom line had declined in earlier quarters as higher costs and writedowns in some segments offset higher revenue. The company, which builds offshore drilling platforms for oil and natural-gas producers, has still benefited from a stronger demand environment as high oil prices drive producers to step up their drilling.
Revenue slumped in the latest quarter, however, due to lower fabrication man hours and weaker marine activity in its Asia Pacific segment, which had delivered soaring revenue in earlier quarters. Revenue improved in the company’s Atlantic segment as U.S. fabrication activity improved.
McDermott in March sold its charter fleet business, generating about $61 million of proceeds.
McDermott posted a profit of $62.8 million, or 26 cents a share, down from $70.4 million, or 30 cents a share, a year earlier. Earnings from continuing operations decreased to 25 cents a share from 29 cents. Revenue fell 19% to $727.7 million.
Analysts polled by Thomson Reuters expected profit of 15 cents a share profit with $835 million in revenue.
Operating costs dropped 20%, while overhead expenses declined 16%.
Backlog, an indication of future sales, stood at $5.8 billion at the end of March, compared with and $4.8 billion a year earlier and $3.9 billion at the end of December.
McDermott shares were up 1% at $22.80 after hours. Through the close, the stock has risen 74% in the past year.
-By Drew FitzGerald, Dow Jones Newswires
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