Oceaneering (OII) Q3 Earnings Beat Estimates, Sales Lag
Oceaneering OII reported a third-quarter 2022 adjusted profit of 23 cents per share, beating the Zacks Consensus Estimate of a profit of 13 cents. This outperformance was largely due to robust results in certain segments.
Moreover, the bottom line strengthened considerably compared to the year-ago quarter’s loss of 1 cent per share. This can be attributed to greater year-over-year revenues from the Subsea Robotics, Manufactured Products and Offshore Projects Group segments.
However, Oceaneering’s total quarterly revenues of $559.7 million marginally lagged the Zacks Consensus Estimate of $561 million due to a decrease in year-over-year sales in a couple of OII’s units. However, revenues increased by approximately 19.9% from the year-ago sales of $466.8 million.
Oceaneering International, Inc. Price, Consensus and EPS Surprise
Oceaneering International, Inc. price-consensus-eps-surprise-chart | Oceaneering International, Inc. Quote
Segmental Information
Subsea Robotics: The unit provides remotely operated submersible vehicles for drill support, vessel-based inspection, subsea hardware installation, pipeline surveys and maintenance services.
Revenues of $169.4 million compared favorably with $143.7 million in the third quarter of 2021. Moreover, the segment reported an operating income of $37 million, greater than the year-ago quarter’s $19.5 million. Days on hire rose 6.5% year over year to 15,408, while ROV utilization increased to 67%.
Manufactured Products: The segment focuses on the manufactured products business, theme park entertainment systems and automated guided vehicles.
Revenues were $94 million, up substantially from the prior-year figure of $75.4 million. Moreover, the segment posted an operating profit of about $4.3 million in the third quarter, up considerably compared to the year-ago quarter’s profit of $809,000. Meanwhile, the backlog rose to $365 million as of Sep 30, 2022.
Offshore Projects Group: This involves Oceaneering’s former Subsea Projects segment, excluding survey services and global data solutions, and the service and rental business, excluding ROV tooling.
Revenues increased by about 60% to $152.9 million from $95.6 million in the year-ago quarter. The uptick in revenues led the unit’s operating income of $20.3 million to compare favorably with the $7.6 million income reported in the third quarter of 2021.
Integrity Management & Digital Solutions: This segment mainly covers Oceaneering’s Asset Integrity segment along with its global data solutions business.
Revenues of $58.5 million went down from the year-ago figure of $62.8 million. Moreover, the segment reported an operating income of $3 million, comparing unfavorably with the prior-year quarter’s $5.4 million as a result of operational issues.
Aerospace and Defense Technologies: The segment is engaged in Oceaneering’s government business, which focuses on defense subsea technologies, marine services and space systems.
Revenues totaled $84.7 million, down from $89.3 million in the third quarter of 2021. As a result, the operating income of $13 million fell from $14.2 million in the year-ago quarter.
Capital Expenditure & Balance Sheet
The capital expenditure in the third quarter, including acquisitions, summed at $19.3 million. As of Sep 30, 2022, OII had cash and cash equivalents worth $427.5 million and $538.1 million respectively, along with long-term debt of about $701.2 million. The debt-to-total capital was 59.5%.
Outlook
Per Oceaneering, its fourth-quarter 2022 EBITDA will decline on relatively flat revenues compared to third-quarter results. In the fourth quarter of 2022, while the company anticipates a seasonal slowdown, it expects relatively good activity in offshore markets.
For the fourth quarter of 2022, Oceaneering predicts unallocated expenses in the mid-$30 million range.
For 2022, Oceaneering now projects its consolidated EBITDA in the $215 million-$240 million range and continued significant free cash flow generation in the revised range of $25-$75 million.
Zacks Rank & Upcoming Releases
Oceaneering currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Some stocks from the energy space that are coming up with their earnings include Occidental Petroleum OXY, ConocoPhillips COP and Marathon Oil MRO.
In the United States, Occidental Petroleum is among the largest oil producers. Occidental Petroleum is likely to post third-quarter results on Nov 8.
The Zacks Consensus Estimate for OXY’s earnings in the current quarter stands at $2.48 per share.
Considering production and reserves, ConocoPhillips is one of the leading exploration and production players in the global market. ConocoPhillips is likely to post third-quarter results on Nov 3.
The Zacks Consensus Estimate for COP’s earnings in the current quarter stands at $3.41 per share.
Marathon Oil is a leading oil and natural gas exploration and production company. Marathon Oil is likely to post third-quarter results on Nov 2.
The Zacks Consensus Estimate for MRO’s earnings in the current quarter is pegged at $1.19 per share.
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