QUOTE AND NEWS
The Hindu Business Line  Jan 12  Comment 
The framework for levying the Merchant Discount Rate (MDR) charge will be in place by January 16 according to Oil Minister Dharmendra Pradhan. “Consumers and dealers will not bear any burden of MDR on...
The Economic Times  Jan 10  Comment 
Merchant Discount Rate, or MDR, is the price a merchant needs to pay for every transaction that happens through the point of sales device, or the card reading machine.
The Hindu Business Line  Jan 9  Comment 
Country’s largest lender SBI has waived Merchant Discount Rate (MDR) on debit card transactions for all small merchants with annual turnover of up to Rs 20 lakh for one year. This, SBI said, has be...
The Hindu Business Line  Jan 9  Comment 
The government assured fuel retailers on Monday that the costs for implementing digital transactions on debit and credit cards will not be borne by them. Stating the Government’s position on the same...
The Economic Times  Jan 3  Comment 
It had asked banks and prepaid payment instrument issuers not to levy any charges for transactions up to Rs 1,000 from January 1 to March 31.
The Economic Times  Dec 15  Comment 
The Reserve Bank of India will reimburse banks' claims of Merchant Discount Rate (MDR) charges on government receipt transactions through credit.
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.




 
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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