Why McDermott International's Shares Dropped Today
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of energy engineering company McDermott International dropped 18% today after announcing earnings.
So what: Second-quarter revenue fell 27% to $647 million after major projects closed in the past year and earnings per share swung to a loss of $0.63. Wall Street was expecting revenue of $757.9 million and income of $0.22 per share, so clearly the company performed well below expectations.
Now what: CFO John McCormack also announced his retirement yesterday, leaving a big void at the top of the company. Analysts from BB&T Capital piled on by rushing to downgrade the stock from buy to hold, which added to the downward pressure. I don't see a reason to buy today given the weak bottom line and would wait for a significant pickup in revenue and backlog before jumping in.
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The article Why McDermott International's Shares Dropped Today originally appeared on Fool.com.Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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