USA: Oceaneering Reports Record First Quarter Earnings

Oceaneering International, Inc. reported record first quarter earnings for the period ended March 31, 2012. On revenue of $594.9 million, Oceaneering generated net income of $51.5 million, or $0.47 per share. During the corresponding period in 2011, Oceaneering reported revenue of $470.4 million and net income of $42.1 million, or $0.39 per share.

Year over year, quarterly earnings per share (EPS) improved as all business segments achieved higher operating income, led by Remotely Operated Vehicles (ROV). Sequentially, quarterly EPS declined, as anticipated, principally due to a eduction in operating income from Subsea Products.

Mr. Kevin McEvoy, President and Chief Executive Officer, stated, “Our EPS was up over 20% compared to the first quarter of 2011 and our outlook for the rest of this year remains very positive. We continue to forecast our 2012 EPS to be in the range of $2.45 to $2.65, another record earnings year. For our services and products, we expect continued international demand growth and a moderate rebound in overall activity in the U.S. Gulf of Mexico (GOM).

“Year over year, quarterly ROV operating income improved on the strength of higher demand in most areas of the world, particularly in the GOM and off West Africa. Our ROV days on hire rose 17% and fleet utilization increased to 79% from 71% a year ago. During the quarter we put five new systems into service and retired two. At the end of the quarter we had 270 vehicles in our ROV fleet, an increase of 10 from March 2011. For the balance of 2012, we expect to place 15 to 20 more new systems into service and retire three.

“Compared to the first quarter of 2011, Subsea Projects operating income was higher due to the commencement of the field support vessel services contract with BP offshore Angola and the addition of the Ocean Patriot to our GOM vessel fleet.

“Sequentially, quarterly Subsea Products operating income declined on lower demand for our subsea hardware and Installation and Workover Control System (IWOCS) services, primarily due to project timing. Our Subsea Products backlog at quarter-end was $402 million, up from $382 million at the end of March and December of 2011. Since the end of the quarter, we announced the award of a large umbilical contract that added $70 million to our products backlog.

“For the second quarter of 2012, we expect improvements in demand and operating results for all of our oilfield business segments. We are forecasting EPS of $0.64 to $0.68.

“Our liquidity and projected cash flow provide us with ample resources to invest in Oceaneering’s growth. At the end of the quarter our cash exceeded our debt. During the quarter we generated EBITDA of $116 million and for 2012 we anticipate generating at least $550 million. We fully intend to pursue organic growth and acquisition opportunities to expand Oceaneering’s asset base and earnings capability.

“Today we announced an increase in our regular quarterly cash dividend to $0.18 from $0.15 per share. This underscores our confidence in Oceaneering’s financial strength and future business prospects.

“Looking beyond 2012, our belief that the oil and gas industry will continue to invest in deepwater projects remains unchanged. Deepwater remains one of the best frontiers for adding large hydrocarbon reserves with high production flow rates at relatively low finding and development costs. With our existing assets, we are well positioned to supply a wide range of the services and products required to support safe deepwater efforts of our customers.”

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Subsea World News Staff , April 26, 2012;  Image: Oceaneering