DailyFinance  Apr 8  Comment 
McDermott International, Inc. (NYSE: MDR) (“McDermott” or the “Company”) announced today that it plans to issue a press release regarding its financial results for the first quarter 2014 on Wednesday, May 7, 2014, ...
OilVoice  Apr 4  Comment 
McDermott International Inc. NYSE MDR announced that one of its subsidiaries has sold the site of the former Harbor Island fabrication yard near Corpus Christi Texas which closed in 2003 for pr
OilVoice  Apr 3  Comment 
McDermott International Inc. NYSEMDR announced that the underwriter of the recently announced public offering of 6.25 tangible equity units the 39Units39 each with a stated value of 25.
Benzinga  Apr 1  Comment 
In a report published Tuesday, Morgan Stanley analyst Ole Slorer reiterated an Underweight rating on McDermott International (NYSE: MDR), and lowered the price target from $6.30 to $6.00. In the report, Morgan Stanley noted, “MDR announced...
TheStreet.com  Apr 1  Comment 
NEW YORK (TheStreet) -- McDermott International  fell 6.9% to $7.28 at 9:52 a.m. on Tuesday after the engineering and construction company announced the pricing of a public offering. The company announced it would offer 10 million tangible...
OilVoice  Apr 1  Comment 
McDermott International Inc. NYSE MDR announced an update to certain operational matters. Through working capital management the Company maintained its previously reported liquidity and leverage
DailyFinance  Mar 31  Comment 
McDermott International, Inc. (NYSE: MDR) announced today an update to certain operational matters. Through working capital management, the Company maintained its previously reported liquidity and leverage position at the end...
OilVoice  Mar 28  Comment 
McDermott International Inc. MDR announced that it intends subject to market and other conditions to offer 500 million aggregate principal amount of its secondlien senior secured notes due 2021
DailyFinance  Mar 25  Comment 
McDermott International, Inc. (NYSE: MDR) (“McDermott”) announced that David Dickson, President and Chief Executive Officer, will present at Howard Weil’s Energy Conference in New Orleans, Louisiana on March 26, 2014 at...
SeekingAlpha  Mar 23  Comment 
By Gordon Tam: Barrons recommended buying McDermott International (MDR), but I would rather invest in a much stronger leader in the same engineering, procurement and construction "EPC" industry, Technip (OTCQX:TKPPY). While MDR reported declining...


McDermott International (NYSE: MDR) is a leading engineering and construction company, with specialty manufacturing and service capabilities. McDermott focuses on executing complex offshore oil and gas projects worldwide, such as fixed and floating production facilities, pipelines, and subsea systems. McDermott’s customers include major energy companies. While the side effects of the BP (BP) Deepwater Horizon incident have made McDermott's Atlantic operations unprofitable, it may benefit from favorable offshore drilling legislation being considered by the U.S. Congress.

Business Growth

McDermott's revenues for the 2011 first quarter were $899.2 million, an increase of 78 percent, compared to $504.9 million in the corresponding period of 2010. The year-over-year increase was primarily due to increases in the Asia Pacific and Middle East segments as a result of higher marine activity on large engineering, procurement, construction and installation projects. These gains were partially offset by lower revenues in the Atlantic segment.[1]

Trends and Forces

Side effects of the BP (BP) Deepwater Horizon oil spill have made McDermott's Atlantic operations unprofitable

McDermott's Atlantic segment has reported a net loss, a side effect of the BP (BP) Deepwater Horizon oil spill. An explosion and fire aboard Transocean's Deepwater Horizon drilling rig off the coast of Louisiana ruptured an oil well, causing the worst oil spill in U.S. history. President Barack Obama ordered a six-month moratorium on drilling in waters 500 feet and deeper as the government investigated the disaster.[2] As a result, the Bureau of Ocean Energy Management, Regulation and Enforcement has been slow to issue new drilling permits in the Gulf of Mexico. This has adversely impacted McDermott's business in the Atlantic.

To help return the Atlantic segment to profitability, McDermott has installed new management, begun cutting costs and recently won new project contracts.[3]

New state and federal legislation favors the offshore drilling industry

Senators John Kerry, Lindsey Graham, and Joe Lieberman have drafted legislation that would boost the supply of domestically produced oil and natural gas, both on- and offshore. The legislation is intended to maximize tax revenue for states that opt to drill oil.[4] Although offshore drilling has traditionally been a controversial topic, the government is beginning to move forward legislation that will benefit the offshore drilling industry. Increasing levels of offshore drilling off the coast of the U.S. will benefit McDermott, as there will be more projects available for its Atlantic segment.


The substantial capital costs involved in becoming an offshore construction contractor create a significant barrier to entry into the market. McDermott, however, faces competition from regional competitors, engineering firms, fabrication facilities, pipelaying companies, and shipbuilding companies.[5]


  1. McDermott Investor Relations: "McDermott Reports Net Income from Continuing Operations of $68.8 Million, $0.29 Per Fully Diluted Share for the 2011 First Quarter"
  2. [http://www.forbes.com/2010/06/09/diamond-offshore-oil-markets-equities-bp.html Forbes: "Offshore Oil Companies Under The Microscope" 9 June 2010.]
  3. McDermott 10-K 2010: Letter to Shareholders
  4. Sumfolio: "Offshore Drillers Could See Upside"
  5. McDermott 10-K 2009, Competition, p. 7

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