QUOTE AND NEWS
SeekingAlpha  Jul 25  Comment 
Washington Real Estate Investment Trust (NYSE:WRE) Q2 2014 Results Earnings Conference Call July 25, 2014, 11:00 AM ET Executives Paul McDermott - President & CEO Bill Camp - EVP & CFO Laura Franklin - EVP & Chief Accounting &...
OilVoice  Jul 21  Comment 
McDermott International Inc. NYSE MDR announce that one of its subsidiaries was awarded a contract to provide transportation and installation services to Walter Oil Gas Corporation 39Walter
Financial Times  Jul 17  Comment 
Under chief executive Bill McDermott, SAP is restructuring its sales operations to give priority to the cloud
OilVoice  Jul 3  Comment 
McDermott International Inc. NYSE MDR announce the successful completion of the AyatsilB Drilling Platform for PEMEX Exploracioacuten y Produccioacuten in the Bay of Campeche Ayatsil field.
Forbes  Jun 16  Comment 
The software industry must reinvent itself to support the new mobile and cloud era. Never was this more apparent than in the latest SAP SAPPHIRE and ASUG conference that was held in Orlando earlier this month. Bill McDermott, the CEO of SAP,...
Forbes  Jun 11  Comment 
As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy -- they expect to make money.  So let's look at two noteworthy recent insider buys.
Forbes  Jun 4  Comment 
This week at SAP's  SAPPHIRE NOW event in Orlando, Florida, SAP CEO Bill McDermott introduced a bold, new SAP to more than 25,000 in-person and 250,000 virtual attendees during his opening keynote. With a new mantra of “Run Simple,” SAP now...
Forbes  Jun 4  Comment 
Increasingly, microorganisms are developing resistance to single antimicrobial agents, while others develop resistance to several agents. These latter organisms are multidrug-resistant, or MDR, strains. In some cases, the microorganisms have...
DailyFinance  Jun 3  Comment 
McDermott International, Inc. (NYSE: MDR) (“McDermott”) announced today that Perry Elders, McDermott’s Senior Vice President and Chief Financial Officer, is scheduled to present at the 2014 Credit Suisse Engineering & ...




 
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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