Shares Of McDermott International Climb

HARTFORD, Conn. (AP) — Shares of McDermott International Inc. rose Tuesday, a day after the energy infrastructure company posted a 48 percent drop in profit while beating Wall Street estimates.

Tahira Afzal, an analyst at KeyBanc Capital Markets, said the Houston company's earnings of 40 cents per share were in line with her estimate "despite a lighter top line and currency translation losses" that she did not factor in.

The results were better than expected, she said in a client note, "given the underlying strength" in subsidiary J. Ray McDermott, which does engineering, construction, installation and project management for offshore oil and gas field development.

Despite a margin of 16 percent for the J. Ray business, "we think it is better to assume this is an exceptional underlying quarter and the current bidding environment will mean some pricing pressure embedded in current bookings." She said she sees no risk to her 2010 estimate of $2.12 per share.

Analysts surveyed by Thomson Reuters expect McDermott International to earn $1.92 per share next year.

Afzal reiterated a "Buy" rating.

McDermott said Monday its profit fell to $92.6 million, or 40 cents per share, from $177.5 million, or 77 cents per share. Revenue sank 13 percent, to $1.56 billion from $1.79 billion. Analysts expected a lower profit of 37 cents per share, and greater revenue of $1.59 billion, according to Thomson Reuters.

Shares rose $1.12, or 5 percent, to $22.44 in afternoon trading.