We are maintaining our Neutral recommendation on McDermott
International. Given its geographic footprint in high-growth
regions, technology leadership and efficient execution skills, MDR
is poised to benefit from strong industry fundamentals for offshore
construction activities through 2015 and beyond. We believe order
flow and backlog for its products and services will continue to be
healthy and trend higher in the near-to-medium term. Additional
positives include growing international operations and a solid
balance sheet. However, several factors will continue to weigh on
results, including steep operating costs, an erratic earnings trend
over the last few quarters and uncertainty regarding the timing of
big awards. As such, we expect its growth potential to be
Incorporated in 1959, Houston, Texas-based McDermott
International Inc. (MDR) is an engineering and construction
company, solely focused on the offshore oil and gas business.
McDermott primarily serves the worldwide offshore oil and gas field
developments, including the front-end design and detailed
engineering, fabrication and installation of offshore drilling and
production facilities, as well as installation of marine pipelines
and subsea production systems. Additionally, the company provides
project management and procurement services. It operates in most
major offshore oil and gas producing regions, including the U.S.,
Mexico, Canada, the Middle East, India, the Caspian Sea and Asia
In August 2010, McDermott completed the spin-off of its Power
Generation Systems' and Government Operations segments into a
separate, independent and publicly traded company Babcock &
Wilcox Co. (BWC).
McDermott International Inc. (MDR): Read the Full
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