QUOTE AND NEWS
The Economic Times  Dec 7  Comment 
After demonetisation, banks have waived off MDR till December 30 to further encourage card transactions.
Motley Fool  Dec 5  Comment 
Wall Street has sent shares of oil services companies roaring in November because of OPEC cuts, but those cuts are probably the last thing McDermott wants to see.
The Economic Times  Nov 23  Comment 
Banking major SBI had already waived MDR on RuPay debit cards last week, while ICICI Bank had waived it yesterday.
Benzinga  Nov 21  Comment 
  Encana Corp (USA) (NYSE: ECA) shares touched a new 52-week high of $12.26. Encana shares have surged 46.37 percent over the past 52 weeks, while the S&P 500 index has gained 4.57 percent in the same period. Headwaters Inc (NYSE:...
The Hindu Business Line  Nov 19  Comment 
State Bank of India has waived the Merchant Discount Rate (MDR) on the RuPay Debit Cards with immediate effect upto December-end 2016. MDR is the commission charged by the acquirer (SBI), which pro...
The Hindu Business Line  Nov 16  Comment 
I couldn’t hear the vacuum cleaner with these excellent feature-rich noise cancellation Bluetooth headphones
Forbes  Oct 31  Comment 
When Bill McDermott, CEO ofSAP, the world’s largest business software provider, believes the next five to 10 years will be far more disruptive than the five to 10 we just lived through, it’s time to sit up and pay attention. The culprits...




 
TOP CONTRIBUTORS

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.

Competition

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]

References

  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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