Oceaneering International, Inc. reported record earnings for the third quarter ended September 30, 2014. On revenue of $973.1 million, Oceaneering generated net income of $124.3 million, or $1.16 per share.
For the third quarter of 2013, Oceaneering reported revenue of $853.3 million and net income of $104.4 million, or $0.96 per share. For the second quarter of 2014, Oceaneering reported revenue of $927.4 million and net income of $110.3 million, or $1.02 per share.
Sequentially, quarterly EPS was 14% higher on operating income improvements from all business segments, led by Remotely Operated Vehicles (ROV). Year over year, quarterly EPS increased by 21% on the strength of operating income improvements from Subsea Products and ROV. EPS for the first nine months of 2014 was up 18% over the comparable period in 2013.
M. Kevin McEvoy, President and Chief Executive Officer, stated, “We achieved record EPS for the quarter, demonstrating the high level of demand we experienced for our subsea services and products. Our results were highlighted by all-time high operating income from our ROV and Subsea Products businesses.
“We remain on track to achieve record EPS for 2014. For the fourth quarter, we are projecting EPS of $0.94 to $0.99. Given this outlook and our year-to-date performance, we are narrowing our 2014 EPS guidance range to $3.95 to $4.00 from $3.95 to $4.05.”
Compared to the second quarter of 2014, ROV operating income increased on higher global demand to support drilling and vessel-based projects and an improvement in operating margin. Oceaneering’s ROV days on hire for the quarter increased to a record high of over 25,200 and the operating margin improved to 31% from 28% due largely to a change in geographic operations mix, resulting in a higher average revenue per day-on-hire.
During the quarter Oceaneering put 14 new vehicles into service and retired five.
Subsea Products operating income was higher due to increased demand for tooling and subsea work systems. Products backlog at quarter-end was $768 million, compared to the June 30 backlog of $850 million and $857 million one year ago.
“Subsea Projects operating income increased due to a seasonal uptick in U.S. Gulf of Mexico demand for diving services. Asset Integrity operating income improved due to activity increases in the United Kingdom and Australia, and a $2.5 million gain on the sale of a non-core operation that was part of our AGR FO acquisition in 2011. Advanced Technologies income increased due to higher profitability on vessel maintenance and engineering services for the U.S. Navy, “said Mr. McEvoy.
The Copmany reported that the liquidity and projected cash flow provide them with resources to invest in Oceaneering’s growth and return cash to the shareholders. Oceaneering generated EBITDA of $241 million during the quarter and $645 million year to date.
“For 2014 and 2015, we anticipate generating EBITDA of at least $845 million and $880 million, respectively,” added McEvoy.
“For 2015 and beyond, we believe that the oil and gas industry will continue 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 and opportunities to add new assets, we are well positioned to supply a wide range of the services and products required to safely support the deepwater efforts of our customers,” McEvoy concluded.