Ahead Of The Bell: McDermott International

HARTFORD, Conn. (AP) — McDermott International Inc.'s nuclear business is drawing more attention from investors and utilities, an analyst said Friday.

Following a meeting with executives of the engineering and construction firm, KeyBanc analyst Tahira Afzal said McDermott outlined four utilities that are showing strong initial interest in nuclear power and "the color provided was more positive than we expected."

Afzal said she sees some possible awards in the fourth quarter of 2009 and early next year "and possible earnings upside into early 2010."

Afzal expects 2009 earnings of $1.66 per share estimates profit of $2.23 per share in 2010. Analysts surveyed by Thomson Reuters expect McDermott International to earn $1.53 per share this year and $1.98 in 2010.

But near-term bookings "remain lumpy" at McDermott's J. Ray McDermott business, which does engineering, construction, installation and project management for offshore oil and gas construction projects. The company believes bidding and pricing will remain stable, Afzal said.

McDermott also believes bidding will increase moderately in its power generation business, and sees a "consistent trend" within its government operations business, she said.

She has a "Buy" rating and $33 price target on the company's shares.