I agree. A P/E of 5 will be more in line than a P/E of 9, so $10 is more in line than $18. I say it is a steal at $10 for a patient investor. It is really hard to say what the next year will bring. I mean oil could go to $200 and this could be back up, but it looks like this will flounder over the next year if oil stays down even with B&W doing so well.
When I first started following this company I was told that they used to have problems quoting jobs back in the day and were always running into cost overruns, but they fixed that. Looks like they didn't.
My opinion is that they should have warned about this. If Fees is nothing but apologetic in his tone today I will never forget it, and will always question any releases. I hear he is an arrogant prick.
While I am pleased with the strong performance of our Power Generation Systems and Government Operations segments, clearly the overall results for McDermott are disappointing this quarter,” said John A. Fees, who became Chief Executive Officer of McDermott on October 1, 2008. “We have experienced continued deterioration, and are forecasting lower future productivity, on a number of Offshore Oil & Gas Construction contracts, primarily Middle East marine pipeline installation projects. We have spent significant time analyzing these projects, which is reflected in our revised project estimates. Our Offshore Oil & Gas Construction segment’s profitability over the next year will be affected by these projects, as we now expect to generate segment margins in the 6-8% range over the next 4-5 quarters. However, the overall market for new offshore projects in the oil & gas industry remains solid.”