Oceaneering Posts Q3 Loss

Oceaneering International has reported a net loss of $66.0 million, or $(0.67) per share, on revenue of $519 million for the three months ended September 30, 2018. 

Adjusted net loss was $13.9 million, or $(0.14) per share, excluding the impact of $56.5 million of certain tax adjustments, the after-tax effects of a $9.3 million gain realized on the sale of a minority interest investment, and $3.7 million of foreign currency exchange losses.

During the corresponding period in 2017, the company reported net loss of $1.8 million, or 2 cents per share, on revenue of $476 million.

To remind, during the prior quarter ended June 30, 2018, Oceaneering reported a net loss of $33.1 million, or $(0.34) per share, on revenue of $479 million.

Roderick A. Larson, president and chief executive officer of Oceaneering, said, “Compared to our adjusted second quarter 2018 results, operating results for the third quarter 2018 improved by $10.4 million, mainly due to favorable profit contributions from Subsea Projects and Subsea Products, and lower Unallocated expenses, partially offset by lower profitability in our Remotely Operated Vehicle (ROV) segment.”

Subsea Product’s operating income during the third quarter 2018 increased 13% in quarterly revenues. The Subsea Products backlog at September 30, 2018, was $333 million, compared to June 30, 2018, backlog of $245 million. The backlog improvement was largely attributable to an increase in order intake for the service and rental business offerings, the company noted.

Subsea Projects achieved a return to profitability, and generated $6.1 million of operating income during the third quarter 2018, on a 35% increase in quarterly revenues.

Looking forward, we believe our fourth quarter 2018 results will be lower than our adjusted third quarter results due to the onset of seasonality leading to reduced levels of offshore energy activity. Sequentially, we expect lower operating income from each of our energy segments, with most of the decline expected to be in Subsea Products and Subsea Projects segments.  Additionally, in our Subsea Products segment we are expecting an unfavorable impact at our manufacturing facility in Panama City, Florida due to damage caused by Hurricane Michael in mid-October 2018.

“We are encouraged that the long-term fundamentals for the offshore energy industry have stabilized and we believe we are now in the early stages of a recovery in activity in general, and in our businesses. We expect a recovery will take time, and only after a sustained higher level of activity can prices for our services and products be increased enough to generate satisfactory returns.”

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