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Market Update : 
McDermott Q2 Earnings Call Transcript
Author: 123jump.com Staff
123jump.com
Last Update: 12:37 AM ET August 20 2008


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Roger Read - Natexis Bleichroeder

Okay. Follow-up on, you mentioned the services work several different times. Are we seeing a reduction in the typical seasonality of the services and parts or, I think back to when you first reconsolidated B&W or power gen, how we had that one month in March that was so strong and you said don''t annualize this, don’t take this to the next quarter, clearly there was seasonality in that business, is that getting somewhat muted with the higher utilization?

Bruce W. Wilkinson

It could be. It''s clear that the shoulder months, the spring and fall are the preferred time to do that sort of work that''s planned. I think what may be happening now is we''ve got more that''s on the fly and unplanned and there is just greater pressure on the turnaround. So, I think customers will be trying to reduce the timeline of genealogist [ph] and it''s not, they don''t…they''re just losing a lot of money, every day they are not up and running. So I think there is more pressure on it and it could become, we could have the shoulder seasons get extended somewhat you might say.

Michael S. Taff

The other thing you''re seeing, Roger, too is in that business just the average kind of ticket price that we''re getting has been increased as a result of just more work needed to keep these plants running.

Roger Read - Natexis Bleichroeder

Okay. And then my final question is still on the power gen segment, given the backlog has been relatively flat; revenue didn''t change a whole lot sequentially here. Do you think this is a business that I don''t know maybe it''s still single-digit sort of top-line performer on a year-over-year basis or is there some sort of log game out there that we may see break and maybe the business picks up. Obviously absent new cold boiler orders because that would be the one thing that would truly kind of get going?

Bruce W. Wilkinson

Well, I think domestically, the…something that would be a big break out of the topside that shows a step change to the upside probably is somewhat dependent on getting the regulatory regime behind what we''re doing is the energy policy sorted out. I think what you will see more of from the B&W unrelated to that is success outside of what you would expect this traditional market to be. We have more credentials and more activity in waste energy and biomass and people realize we have a number of initiatives ongoing addressing the international market. The activity I alluded to in the tar sands, small, but clear example of that. So, I think you will see the regime running the operation up there, more aggressive outside of the traditional North American market and because it is a huge and robust market in many places outside of North America. So I think of our own accord, you will see us take firmer grip on the range and try to drive the growth in some ways that are not just living within the current box so to speak.

Roger Read - Natexis Bleichroeder

Okay, thank you.

Bruce W. Wilkinson

Sure.

Operator

And our next question will come from the line of John Rogers with D.A. Davidson. Please proceed.

John Rogers - D.A. Davidson

Hi, good morning.

Bruce W. Wilkinson

Good morning.


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