According to the Complaint, McDermott International, Inc. ("McDermott" or the Company) purports to provide engineering, procurement, construction, and installation and technology solutions to the energy industry. McDermott purportedly designs and builds infrastructure and technology solutions to transport and transform oil and gas into a variety of products.
According to the press release issued by Plaintiff's law firm, on October 30, 2018, after the close of trading, McDermott reported financial results for third quarter 2018 that fell far below analysts’ estimates. McDermott reported revenues of $2.29 billion, compared to midpoint estimates of $2.51 billion, and earnings per share of $0.20, versus midpoint estimates of $0.29. The Company also reported a $744 million change in the value of certain projects it had acquired from Chicago Bridge & Iron Company (“CB&I”). And, the Company further disclosed plans to sell McDermott’s storage tank business and its U.S. pipe fabrication business, as those businesses, “are not core to the Company’s long term strategic objectives.”
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company was facing strong headwinds and would fail to meet revenue and earnings estimates; (2) that there were material problems with the integration of the CB&I business; (3) that certain CB&I projects were reasonably likely to incur higher costs; (4) that, as a result, the fair value of these CB&I projects would be materially impacted; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On February 22, 2019, the Court issued an Order consolidating cases. Lead Case No. 4:18-cv-04330 and Member Case No. 4:19-cv-0135 were consolidated. On June 4, the Court issued an Order consolidating cases and appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on September 19. On October 4, Lead Plaintiff filed a corrected amended Complaint.