McDermott International’s YTD returns
McDermott International’s (MDR) YTD (year-to-date) returns were 16.4% as of March 13, 2018. YTD, McDermott International has outperformed the US rig count, West Texas Intermediate crude oil, and the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES tracks an index of companies in the US oilfield equipment and services industry. So far in 2018, McDermott International has outperformed the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which has fallen 6.7%. XOP tracks an index of companies in the US energy space.
McDermott International’s stock price was the highest YTD at $8.98 on January 24. Since then, the stock price has declined 15% until March 13.
How did McDermott International perform in 2017?
From 2016 through 2017, McDermott International’s revenues increased 13%. The company’s net income increased 388% from 2016 to 2017. Higher earnings in 2017 were driven by project activities in Saudi Aramco’s LTA II Lump Sum project, Marjan power system replacement projects, and progress on the Inpex Ichthys project.
In 2016, McDermott International’s net income was reduced due to restructuring charges of $11.3 million and impairment charges of $55.0 million. McDermott International’s FCF (free cash flow) turned positive in 2017. The company reduced its net debt 6% compared to 2016. Improved revenues, higher earnings, better FCF, and a lower debt level have contributed to McDermott International’s outperformance in 2018.
Next, we’ll compare Tenaris SA’s (TS) YTD returns with market indicators. We’ll also analyze the company’s fundamental metrics.