McDermott International (MDR) Bonds Trading 9.8% Lower Earnings

An issue of McDermott International Inc (NYSE:MDR) bonds fell 9.8% as a percentage of their face value during trading on Wednesday after the company announced weaker than expected quarterly earnings. The debt issue has a 10.625% coupon and is set to mature on May 1, 2024. The bonds in the issue are now trading at $89.94 and were trading at $101.50 one week ago. Price changes in a company’s bonds in credit markets often predict parallel changes in its share price. The oil and gas company reported $0.20 earnings per share for the quarter, missing the Thomson Reuters’ consensus estimate of $0.29 by ($0.09). The firm had revenue of $2.29 billion during the quarter, compared to analysts’ expectations of $2.50 billion. McDermott International had a return on equity of 9.45% and a net margin of 2.05%. McDermott International’s revenue for the quarter was up 138.7% on a year-over-year basis. During the same period in the previous year, the company earned $0.33 earnings per share.

MDR has been the topic of several recent research reports. Zacks Investment Research cut McDermott International from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, September 11th. ValuEngine cut McDermott International from a “sell” rating to a “strong sell” rating in a research note on Thursday, September 6th. Credit Suisse Group reduced their price target on McDermott International from $25.00 to $23.00 and set a “neutral” rating on the stock in a research note on Monday, August 13th. Citigroup reduced their price target on McDermott International from $27.00 to $21.00 and set a “$17.66” rating on the stock in a research note on Monday, July 23rd. Finally, TheStreet cut McDermott International from a “b-” rating to a “c+” rating in a research note on Wednesday, October 24th. Two investment analysts have rated the stock with a sell rating, five have assigned a hold rating and one has assigned a buy rating to the stock. McDermott International presently has a consensus rating of “Hold” and an average price target of $24.91.

In other McDermott International news, SVP Scott Munro sold 2,250 shares of the business’s stock in a transaction on Tuesday, October 16th. The stock was sold at an average price of $15.90, for a total value of $35,775.00. Following the sale, the senior vice president now directly owns 33,020 shares of the company’s stock, valued at $525,018. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Insiders own 1.30% of the company’s stock.

Institutional investors have recently added to or reduced their stakes in the business. Envestnet Asset Management Inc. bought a new stake in McDermott International in the second quarter worth $117,000. Icon Wealth Partners LLC bought a new stake in McDermott International in the second quarter worth $134,000. Hanson & Doremus Investment Management boosted its holdings in McDermott International by 60.2% in the second quarter. Hanson & Doremus Investment Management now owns 6,831 shares of the oil and gas company’s stock worth $134,000 after acquiring an additional 2,566 shares in the last quarter. NumerixS Investment Technologies Inc bought a new stake in McDermott International in the second quarter worth $162,000. Finally, Nisa Investment Advisors LLC boosted its holdings in McDermott International by 549.3% in the second quarter. Nisa Investment Advisors LLC now owns 9,252 shares of the oil and gas company’s stock worth $182,000 after acquiring an additional 7,827 shares in the last quarter. 87.89% of the stock is currently owned by institutional investors and hedge funds.

The company has a debt-to-equity ratio of 0.96, a current ratio of 0.93 and a quick ratio of 0.92. The firm has a market capitalization of $2.32 billion, a P/E ratio of 4.57 and a beta of 1.79.

About McDermott International (NYSE:MDR)

McDermott International, Inc provides engineering, procurement, construction and installation, front-end engineering and design, and module fabrication services for upstream field developments. It operates through three segments: the Americas, Europe and Africa; the Middle East; and Asia. The company delivers fixed and floating production facilities, pipeline installations, and subsea systems from concept to commissioning for offshore and subsea oil and gas projects.

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