Oceaneering International, Inc. today reported record earnings for the third quarter ended September 30, 2013. On revenue of $853 million, Oceaneering generated net income of $104.4 million, or $0.96 per share.
For the third quarter of 2012, Oceaneering reported revenue of $734 million and net income of $84.4 million, or $0.78 per share. For the second quarter of 2013, Oceaneering reported revenue of $820 million and net income of $98.8 million, or $0.91 per share.
Sequentially, quarterly EPS was 5% higher on operating income improvements from Remotely Operated Vehicles (ROV) and Subsea Projects. Year over year, quarterly EPS increased by 23% on operating income improvements from all business segments.
M. Kevin McEvoy, President and Chief Executive Officer, stated, “We achieved record EPS for the quarter, demonstrating the high level of demand we are experiencing for our subsea services and products. Our results were highlighted by all-time high operating income from our ROV business and better than anticipated Subsea Products operating margin.
“Overall, we remain on track to achieve record EPS for 2013, which we now believe will be up more than 25% over 2012. Given our third quarter results and an improved fourth quarter outlook for Subsea Products and Subsea Projects, our new annual guidance range is $3.35 to $3.40, up from $3.20 to $3.35. For the fourth quarter of 2013, we are projecting EPS of $0.80 to $0.85.
High demand for ROVs
“Compared to the second quarter of 2013, ROV operating income increased on higher global demand to support drilling and vessel-based projects. Our ROV days on hire for the quarter increased to a record high of nearly 23,700 and our fleet utilization rate rose to 86%. During the quarter we put seven new vehicles into service and transferred one system to Advanced Technologies for non-oilfield use. At the end of September we had 302 vehicles in our fleet, compared to 285 one year ago. Subsea Projects operating income increased due to a seasonal uptick in U.S. Gulf of Mexico demand for deepwater intervention and shallow water diving services and additional vessel activity offshore Angola.
“Subsea Products operating income was flat with the second quarter of 2013, and was better than we had anticipated due to a higher contribution from tooling. Products backlog at quarter-end was $857 million, down 5% from our June 30 backlog of $902 million and up 38% from $619 million one year ago.
“We are initiating 2014 EPS guidance with a range of $3.90 to $4.10, up 19% at the midpoint over our forecast for 2013. For our services and products, we anticipate continued global demand growth to support deepwater drilling, field development, and inspection, maintenance, and repair activities. This market outlook is supported by industry observations and assessments that deepwater drilling is increasing, subsea equipment orders are growing, and backlog to perform offshore construction projects is at a historically high level.
Big expectations for oilfield business
“Compared to 2013, we anticipate all of our oilfield segments will have higher operating income in 2014, notably: ROV on greater service demand to support drilling and vessel-based projects, led by increased activity off Africa; Subsea Products on higher demand for each of our major product lines; and Subsea Projects on growth in deepwater intervention service activity in the U.S. Gulf of Mexico and additional work offshore Angola.
“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 reflected $102 million of cash, $40 million of debt, and $2.0 billion of equity. We generated EBITDA of $204 million during the quarter and $559 million year to date. For 2013 and 2014, we anticipate generating EBITDA of at least $735 million and $845 million, respectively.
“Looking beyond 2014, we believe that the oil and gas industry will increase its investment in deepwater projects. 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 the safe deepwater efforts of our customers.”
Press Release, October 29, 2013