Oceaneering International, Inc. today reported record quarterly earnings for the second quarter ended June 30, 2013.
On revenue of $820.4 million, Oceaneering generated net income of $98.8 million, or $0.91 per share. During the corresponding period in 2012, Oceaneering reported revenue of $672.5 million and net income of $72.6 million, or $0.67 per share.
Year over year and sequentially, quarterly EPS increased as all business segments achieved higher operating income, led by Subsea Products and Subsea Projects.
M. Kevin McEvoy, President and Chief Executive Officer, stated, “Our quarterly EPS was above our guidance range, and was up 32% over the first quarter of this year and up 36% compared to the second quarter of 2012. Our above-guidance performance was attributable to sales of subsea hardware, demand for asset integrity services offshore Norway, and early completion of a theme park project. We achieved record quarterly operating income from Remotely Operated Vehicles (ROV), Subsea Products, Asset Integrity, and Advanced Technologies.
“Our outlook for the second half of this year remains very positive and essentially unchanged from last quarter. Given this outlook and our year-to-date performance, we are raising our 2013 EPS guidance range to $3.20 to $3.35 from $3.10 to $3.30. Compared to 2012, we continue to forecast income growth for all of our operating segments in 2013. Relative to the first half of 2013, we expect to generate higher operating income during the second half led by ROV and Subsea Projects.
“Compared to the first quarter, Subsea Products operating income rose on the strength of increased revenue and profitability from tooling and subsea hardware. Subsea Products backlog at quarter end was $902 million, up from our March backlog of $776 million and $621 million one year ago. The sequential and year-over-year increases in backlog were predominantly attributable to umbilical awards. During the quarter we announced two large umbilical contracts, one for offshore Egypt and one for the U.S. Gulf of Mexico (GOM).
“Subsea Projects operating income increased due to a seasonal uptick in GOM demand for deepwater intervention and an escalation of work under our field support vessel services contract offshore Angola. The work offshore Angola included the provision of another chartered vessel, the Maersk Attender, for half of the quarter. The charter term on the Maersk Attender runs through September 2013, followed by two 45-day renewal options, subject to our customer’s work program.
“ROV operating income improved on higher demand for drill support services and an increase in average revenue per day-on-hire. During the quarter we put four new ROVs into service and retired two. At the end of June we had 296 vehicles in our fleet, compared to 280 one year ago. We now anticipate adding about 30 new systems to our ROV fleet in 2013. During the second half of this year, we expect to place approximately 20 more new systems into service.
“Asset Integrity operating income rose on higher service sales in most of the major geographic areas we serve. Advanced Technologies operating income improved on an acceleration of theme park project work and incentive fees for meeting schedule completion dates.
“For the third quarter of 2013, we are projecting EPS of $0.90 to $0.95. We expect sequential improvements in operating income from our ROV and Subsea Projects businesses. Due to project timing, we are anticipating that Subsea Products and Advanced Technologies will have lower results.
“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 $119 million of cash, $75 million of debt, and $1.9 billion of equity. During the quarter we generated EBITDA of $195 million, $354 million year to date, and for 2013 we anticipate generating at least $710 million. We fully intend to pursue organic growth and acquisition opportunities to expand Oceaneering’s asset base and earnings capabilities.
“As announced in April, we increased by 22% our regular quarterly cash dividend to $0.22 from $0.18 per share. This underscores our continued 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.”