McDermott International, Inc. (NYSE: MDR) (“McDermott” or the “Company”) today reported income from continuing operations of $9.3 million, or $0.04 per diluted share, for the 2011 fourth quarter. The results of the 2011 fourth quarter compare to income from continuing operations of $45.5 million, or $0.19 per diluted share, in the corresponding period of 2010. Classified as discontinued operations, the results of McDermott’s charter fleet business are excluded from all periods presented, and The Babcock & Wilcox Company, which was spun-off to McDermott shareholders on July 30, 2010, is excluded from the 2010 and 2009 full-year results. Weighted average common shares outstanding on a fully diluted basis were approximately 236.9 million and 237.0 million in the quarters ended December 31, 2011 and December 31, 2010, respectively.
McDermott’s revenues were $816.2 million for the 2011 fourth quarter, an increase of over 51 percent compared to $539.6 million in the corresponding period of 2010. The year-over-year increase was primarily due to a 134 percent increase in revenues in the Asia Pacific segment as a result of expanded scope and marine activity on a large engineering, procurement, construction and installation project, coupled with increased revenues in the Middle East and Atlantic segments.
The Company’s operating income in the 2011 fourth quarter was $31.4 million, compared to $59.3 million in the 2010 fourth quarter. Operating income in the 2011 fourth quarter was negatively affected by an aggregate of approximately $66 million (pretax and after-tax) from additional project losses and increased contingency on certain projects, primarily the nearly-complete Mexican pipelay project and the 5-year charter contract in Brazil, partially offset by one-time benefits associated with the Company’s captive insurance program, a partial recovery of exit costs on a discontinued fabrication facility and the reversal of previously accrued compensation expenses. In the Asia Pacific segment, operating income increased $70 million as compared to the 2010 fourth quarter.
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