SembMarine

SembMarine (SMM): 3Q11 results above the Street average. But note the wide range of estimates, hence SMM appears to have beat, met and missed forecasts, depending on the research house.
3Q11 net profit came in at $223m, +49% qoq, -25% yoy, vs Bloomberg consensus of $195m.
Revenue reached $1.3b, +57% qoq, +17% yoy, driven by the resumption of revenue recognition on semisub, Songa Eclipse, upon delivery.
Gross margin reached 19.5%, -300bps qoq, due to shift in revenue mix as rig building turnover more than doubled (68% of sales vs 48% in 2Q11).
Operating margins at 16.2% continue to pale compared to KEP O&M’s 26%. Mgt guides to close the year with 15-18% Op margin and says the margin for new builds has fallen to 12-15% now.
Note that bottom line was given a near $40m boost, as interest income surged to $47.2m from $6.1m yoy, from interest received for deferred payment grated to customers.
Ytd order wins amount to $3.2b, with order backlog at $5.2b. Mgt noted a higher level of enquiries for semisubs (vs 2Q11) and believes day-rate strength (~US$500k/day on certain contracts) on recent fixtures are indicative of cycle outlook moving forward. SMM currently has 8 options with the majority expected to expire in early ’12.
Citi keeps at Buy with TP $4.76.
BNP keeps at Buy, raises TP to $4.74 from $4.67, says hard to rule out a special div given $1.9b net cash and zero debt.
HSBC keeps at Overweight with TP $6.05.
Deutsche keeps at Buy, but lowers TP to $5.80 from $6.20.