Ahead of the Bell: McDermott International

Jefferies analyst Stephen Gengaro lowered his rating to "Hold" from "Buy," cut his price target to $14 from $28. He also reduced his 2009 earnings-per-share estimate to $1.85 from $2.80.

Late Wednesday, McDermott reported its net income slid to 37 cents per share from 61 cents per share. Analysts expected earnings of 69 cents per share, according to Thomson Reuters.

McDermott's offshore oil and gas unit posted a $19.7 million loss after booking $90 million in contract losses, which came about because of revised cost estimates and increased downtime.

Gengaro said challenges that he previously saw as short-term and under management's control now appear more significant.

"There is too much uncertainty to advocate buying the shares on weakness," he wrote in a note to clients.

McDermott shares fell $3.56, or 22.9 percent, to $12 in premarket trading. In the last 52 weeks the stock has ranged from $11.26 to $67.14.