QUOTE AND NEWS
Financial Times  Apr 24  Comment 
Most arrivals in 2014 were from Syria, then Eritrea, Mali and Nigeria, says John McDermott
TheStreet.com  Apr 21  Comment 
NEW YORK (TheStreet) -- McDermott International shares are retreating by 5.46% to $4.85 in afternoon trading on Tuesday, as falling crude prices put pressure on the oil sector today.Industry benchmark Brent Crude for June delivery slipped by...
TheStreet.com  Apr 17  Comment 
NEW YORK (TheStreet) -- Shares of McDermott International  are tanking, down 6.44% to $5.16 in afternoon trading Friday, as crude prices slip to trade in the red.  Earlier today in a report by oilfield services giant Baker Hughes , data...
TheStreet.com  Apr 15  Comment 
NEW YORK (TheStreet) -- Shares of engineering company McDermott International   rose 5.27% to $5.39 in afternoon trading Wednesday as oil prices extended their rally. McDermott is an an engineering company with much of its operations in the...
Financial Times  Apr 15  Comment 
A place of horrible death only weeks ago now seems full of life, writes John McDermott
TheStreet.com  Apr 14  Comment 
NEW YORK (TheStreet) -- Shares of McDermott International were gaining 6.3% to $5.16 Tuesday as oil prices rise due to the weaker U.S. dollar. WTI crude oil for May delivery was up 2.4% to $53.17 a barrel late Tuesday morning, and Brent crude...
Benzinga  Apr 14  Comment 
In a report published Tuesday, Imperial Capital analysts upgraded the rating on McDermott International, Inc (NYSE: MDR) from In-Line to Outperform, while raising the price target from $4 to $6. The analysts mentioned that the company's prospects...
MedPage Today  Apr 8  Comment 
(MedPage Today) -- The latest news and research in gastroenterology.




 
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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