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McDermott International, Inc. (NYSE: MDR) (“McDermott” or the “Company”) today reported net income of $40.5 million, or $0.17 per diluted share, for the 2012 fourth quarter. The results of the 2012 fourth quarter compare to income from continuing operations of $9.3 million, or $0.04 per diluted share, in the corresponding period of 2011. Weighted average common shares outstanding on a fully diluted basis were approximately 237.8 million and 236.9 million in the quarters ended December 31, 2012 and 2011, respectively.
McDermott’s revenues were $996.0 million for the 2012 fourth quarter, an increase of 22 percent compared to $816.2 million in the corresponding period of 2011. The year-over-year increase was primarily due to a 36 percent increase in revenues in the Asia Pacific segment as a result of increased marine activity on a subsea project, coupled with increased revenues in the Middle East and Atlantic segments.
The Company’s operating income in the 2012 fourth quarter was $77.3 million, an increase of 146 percent compared to $31.4 million in the 2011 fourth quarter. Results in the fourth quarter 2011 included approximately $66 million in pretax and after-tax charges primarily related to loss projects in Mexico and Brazil. The fourth quarter 2012 results were negatively affected by an aggregate of approximately $32 million of project losses and increased costs on certain projects, including approximately $23 million in the Asia Pacific segment as a result of incremental costs associated with anticipated productivity and project delays on one subsea project, which is expected to complete in late 2013. The Atlantic segment also was impacted by increased cost estimates relating to two fabrication projects totaling approximately $9 million, due to lower than expected productivity, which are expected to complete in mid-2013.
The Company’s other income for the fourth quarter of 2012 was $8.7 million, an improvement of $4.8 million compared to other income of $3.9 million in the fourth quarter of 2011, primarily due to higher foreign currency gains.