Oceaneering’s Net Income Rises (USA)

Oceaneering International, Inc. reported record first quarter earnings for the period ended March 31, 2013. On revenue of $718.6 million, Oceaneering generated net income of $74.8 million, or $0.69 per share. During the corresponding period in 2012, Oceaneering reported revenue of $594.9 million and net income of $51.5 million, or $0.47 per share.

Year over year, quarterly EPS increased 47% on income improvements from all operating business segments, led by Remotely Operated Vehicles (ROV) and Subsea Products. Sequentially, quarterly EPS declined, as anticipated, because of a reduction in operating income from Subsea Products as a result of project timing and Subsea Projects due to seasonality in the U.S. Gulf of Mexico (GOM).

M. Kevin McEvoy, President and Chief Executive Officer, stated, “Our first quarter EPS was above our guidance range as we are off to a faster-than-expected start to the year. This was, to a large extent, attributable to an acceleration of the timing of forecasted work in our Asset Integrity and Advanced Technologies businesses. All of our business segments performed well, with Advanced Technologies achieving record quarterly operating income.

“Year over year, quarterly ROV operating income improved on the strength of a 13% increase in days on hire, particularly in the GOM and offshore Africa. Our fleet utilization increased to 83% from 79% a year ago. During the quarter we put six new systems into service and retired one. At the end of the quarter we had 294 vehicles in our ROV fleet, an in crease of 24 from March 2012. For the balance of 2013, we expect to place 24 to 29 more new systems into service.

“Subsea Products operating income was higher due to improved demand for all of our major product lines. Our Subsea Products backlog at quarter-end was $776 million, compared to $402 million at the end of March 2012 and $681 million at the end of December 2012.

“Subsea Projects operating income increased on a full quarter of work on a field support vessel services contract offshore Angola, which commenced in February 2012. Asset Integrity operating income improved on increased service demand in most geographic areas in which we operate. Furthermore, during the first quarter of 2012, Asset Integrity results were adversely affected by a low profit contribution from operations acquired in December 2011 and poor execution on a job in the U.S. Advanced Technologies operating income was higher in 2013 on an increase in work and operational efficiency on theme park projects and submarine maintenance activity for the U.S. Navy.

“Our outlook for the rest of this year remains very positive. We continue to anticipate global demand growth for our services and products to support deepwater drilling, field development, and inspection, maintenance, and repair activities. We  expect all of our operating business segments will achieve higher income in 2013 compared to 2012, notably: ROV on greater service demand to support drilling and vessel-based projects; Subsea Products on higher demand for all of our major product lines, led by subsea hardware; and Subsea Projects on a full year of work offshore Angola.

“Given this outlook and our first quarter earnings performance, we are raising our annual 2013 EPS guidance. Our new guidance range is $3.10 to $3.30, up from $3.00 to $3.25 previously. For the second quarter of 2013, we expect improvements in demand and operating results for all of our oilfield business segments. We are forecasting EPS of $0.81 to $0.86.

“Our liquidity and projected cash flow provide us with ample resources to invest in Oceaneering’s growth. At the end of the quarter, our balance sheet remained conservatively capitalized with $128 million of cash, $90 million of debt, and $1.8 billion of equity. During the quarter we generated EBITDA of $160 million and for 2013 we anticipate generating at least $690 million of EBITDA. We fully intend to pursue organic growth and acquisition opportunities to expand Oceaneering’s asset base and earnings capability.

“Today we announced a 22% increase in our regular quarterly cash dividend to $0.22 from $0.18 per share. This underscores our confidence in Oceaneering’s financial strength and future business prospects.

“Looking beyond 2013, 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 services and products to safely support the deepwater efforts of our customers.”

[mappress]

Press Release, April 24, 2013