McDermott International Inc reported higher quarterly net income on Monday as offshore oil and gas work offset weakness in power generation systems, but it posted revenue well short of analysts' estimates.

Its shares fell 3 percent, as investors scale back their expectations for any recovery in engineering projects this year after downbeat 2010 outlooks from Fluor Corp and Foster Wheeler AG last week.

McDermott said fourth-quarter net income rose to $98.7 million, or 42 cents per share, from $43 million, or 19 cents per share, in the same quarter a year before. Revenue fell to $1.46 billion from $1.66 billion.

Analysts, on average, had expected a profit of 39 cents per share on revenue of $1.53 billion, according to Thomson Reuters I/B/E/S.

These results highlight the resiliency of our businesses in what still remains a challenging economic environment, Chief Executive John Fees said in a statement.

Shares of McDermott fell to $23.10 in after-hours trading, after closing at $23.82, up 4.25 percent.

The Houston-based company's backlog fell to $8.1 billion at the end of 2009 from $8.5 billion three months before.

In December, McDermott announced plans to split off nuclear power division Babcock & Wilcox as another public company at some point this year.

(Reporting by Braden Reddall; Editing by Carol Bishopric and Steve Orlofsky)

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