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Oceaneering Announces Record First Quarter Earnings

Date : 04/25/2012 @ 5:01PM
Source : PR Newswire (US)
Stock : Oceaneering International, Inc. (OII)
Quote : 73.79  0.83 (1.14%) @ 5:46AM
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Oceaneering Announces Record First Quarter Earnings

Oceaneering (NYSE:OII)
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HOUSTON, April 25, 2012 /PRNewswire/ -- Oceaneering International, Inc. (NYSE:OII) today reported record first quarter earnings for the period ended March 31, 2012.  On revenue of $594.9 million, Oceaneering generated net income of $51.5 million, or $0.47 per share.  During the corresponding period in 2011, Oceaneering reported revenue of $470.4 million and net income of $42.1 million, or $0.39 per share.

Summary of Results

(in thousands, except per share amounts)







                       Three Months Ended              



                March 31         

  Dec. 31 



2012

2011

2011

Revenue

$594,893

$470,420

$574,197

Gross Profit

123,303

98,801

130,746

Income from Operations

75,987

61,067

82,468

Net Income

51,455

$42,070

$58,317









Diluted Earnings Per Share

$0.47

$0.39

$0.54



Year over year, quarterly earnings per share (EPS) improved as all business segments achieved higher operating income, led by Remotely Operated Vehicles (ROV).  Sequentially, quarterly EPS declined, as anticipated, principally due to a reduction in operating income from Subsea Products.

M. Kevin McEvoy, President and Chief Executive Officer, stated, "Our EPS was up over 20% compared to the first quarter of 2011 and our outlook for the rest of this year remains very positive.  We continue to forecast our 2012 EPS to be in the range of $2.45 to $2.65, another record earnings year.  For our services and products, we expect continued international demand growth and a moderate rebound in overall activity in the U.S. Gulf of Mexico (GOM).

"Year over year, quarterly ROV operating income improved on the strength of higher demand in most areas of the world, particularly in the GOM and off West Africa.  Our ROV days on hire rose 17% and fleet utilization increased to 79% from 71% a year ago.  During the quarter we put five new systems into service and retired two.  At the end of the quarter we had 270 vehicles in our ROV fleet, an increase of 10 from March 2011.  For the balance of 2012, we expect to place 15 to 20 more new systems into service and retire three.

"Compared to the first quarter of 2011, Subsea Projects operating income was higher due to the commencement of the field support vessel services contract with BP offshore Angola and the addition of the Ocean Patriot to our GOM vessel fleet.

"Sequentially, quarterly Subsea Products operating income declined on lower demand for our subsea hardware and Installation and Workover Control System (IWOCS) services, primarily due to project timing.  Our Subsea Products backlog at quarter-end was $402 million, up from $382 million at the end of March and December of 2011.  Since the end of the quarter, we announced the award of a large umbilical contract that added $70 million to our products backlog.

"For the second quarter of 2012, we expect improvements in demand and operating results for all of our oilfield business segments.  We are forecasting EPS of $0.64 to $0.68.

"Our liquidity and projected cash flow provide us with ample resources to invest in Oceaneering's growth.  At the end of the quarter our cash exceeded our debt.  During the quarter we generated EBITDA of $116 million and for 2012 we anticipate generating at least $550 million.  We fully intend to pursue organic growth and acquisition opportunities to expand Oceaneering's asset base and earnings capability.

"Today we announced an increase in our regular quarterly cash dividend to $0.18 from $0.15 per share.  This underscores our confidence in Oceaneering's financial strength and future business prospects. 

"Looking beyond 2012, 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 the services and products required to support safe deepwater efforts of our customers."

Statements in this press release that express a belief, expectation, or intention are forward looking.  The forward-looking statements in this press release include the statements concerning Oceaneering's:  expectation for the balance of 2012 of placing 15 to 20 new ROVs into service and retiring three; 2012 EPS range forecast; expectation of record earnings in 2012 based on continued international demand growth and a moderate rebound in overall activity in the GOM; backlog, to the extent that backlog may be an indicator of future revenue or profitability; expected improvements in demand and operating results for all of its oilfield business segments for the second quarter of 2012; second quarter 2012 forecasted EPS range; expectation that its liquidity and projected cash flow will provide ample resources to invest in the company's growth; anticipated  2012 EBITDA; intent to pursue organic growth and acquisitions to expand its asset base and earnings capability;  belief that the oil and gas industry will continue to invest in deepwater projects; and belief that deepwater remains one of the best frontiers for adding large hydrocarbon reserves with high production flow rates. 

These forward-looking statements are made pursuant to the safe harbor provisions of The Private Securities Litigation Reform Act of 1995 and are based on current information and expectations of Oceaneering that involve a number of risks, uncertainties, and assumptions.  Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to:  industry conditions; prices of crude oil and natural gas; Oceaneering's ability to obtain, and the timing of, new projects; changes in customers' operational plans or schedules; contract cancellations or modifications; difficulties executing under contracts; and changes in competitive factors.  Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, actual outcomes could vary materially from those indicated.  For a more complete discussion of these and other risk factors, please see Oceaneering's annual report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission.  

We define EBITDA as net income plus provision for income taxes, interest income/expense, net, and depreciation and amortization.  EBITDA is a non-GAAP financial measure.  We have included EBITDA disclosures in this press release because EBITDA is widely used by investors for valuation and comparing our financial performance with the performance of other companies in our industry.  Our presentation of EBITDA may not be comparable to similarly titled measures other companies report.  Non-GAAP financial measures should be viewed in addition to and not as an alternative for our reported operating results or cash flow from operations or any other measure of performance as determined in accordance with GAAP.  For a reconciliation of these EBITDA amounts to the most directly comparable GAAP financial measures, please see the attached schedules.

Oceaneering is a global oilfield provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deepwater applications.  Through the use of its applied technology expertise, Oceaneering also serves the defense and aerospace industries.

For further information, please contact Jack Jurkoshek, Director Investor Relations,

Oceaneering International, Inc., 11911 FM 529, Houston, Texas 77041;

Telephone 713-329‑4670;

E-Mail investorrelations@oceaneering.com.  A live webcast of the company's earnings release conference call, scheduled for Thursday, April 26, 2012 at 11:00 a.m. Eastern, can be accessed at www.oceaneering.com/investor-relations/.

 

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES















CONDENSED CONSOLIDATED BALANCE SHEETS





































Mar. 31, 2012



Dec. 31, 2011









(in thousands)

ASSETS











Current Assets (including cash and cash equivalents of $127,492











    and $106,142)



$           973,067



$           984,122



Net Property and Equipment



948,622



893,308



Other Assets



532,823



523,114





TOTAL ASSETS



$        2,454,512



$        2,400,544





























LIABILITIES AND SHAREHOLDERS' EQUITY











Current Liabilities



$           525,994



$           501,375



Long-term Debt



100,000



120,000



Other Long-term Liabilities



216,563



221,207



Shareholders' Equity



1,611,955



1,557,962





TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY



$        2,454,512



$        2,400,544

CONDENSED CONSOLIDATED STATEMENTS OF INCOME



















For the Three Months Ended





Mar. 31,



Mar. 31,



Dec. 31,





2012



2011



2011





(in thousands, except per share amounts)















Revenue



$     594,893



$         470,420



$          574,197

Cost of services and products



471,590



371,619



443,451

Gross Profit



123,303



98,801



130,746

Selling, general and administrative expense



47,316



37,734



48,278

Income from Operations



75,987



61,067



82,468

Interest income



344



167



428

Interest expense



(545)



(147)



(350)

Equity earnings of unconsolidated affiliates, net



804



470



859

Other income (expense), net



(1,473)



(141)



1,792

Income before Income Taxes



75,117



61,416



85,197

Provision for income taxes



23,662



19,346



26,880

Net Income



$       51,455



$           42,070



$            58,317















Weighted Average Number of Diluted Common Shares



108,761



109,002



108,671

Diluted Earnings per Share 



$0.47



$0.39



$0.54

















The above Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income should be read in conjunction with Company's latest Annual Report on Form 10-K.





SEGMENT INFORMATION



























For the Three Months Ended









Mar. 31,



Mar. 31,



Dec. 31,









2012



2011



2011









($ in thousands)





















Remotely Operated Vehicles

Revenue



$     193,971



$         164,328



$          200,681





Gross Profit



$       66,392



$           55,408



$            69,298





Operating income



$       56,933



$           47,406



$            59,100





Operating margin



29%



29%



29%





Days available



24,246



23,274



24,277





Utilization



79%



71%



79%





















Subsea Products

Revenue



$     172,081



$         157,318



$          196,987





Gross Profit



$       46,781



$           41,787



$            53,285





Operating income



$       29,510



$           27,683



$            36,743





Operating margin



17%



18%



19%





Backlog



$     402,000



$         382,000



$          382,000





















Subsea Projects

Revenue



$       72,676



$           37,569



$            45,263





Gross Profit



$       11,911



$             5,331



$              9,108





Operating income



$         7,567



$             3,036



$              6,769





Operating margin



10%



8%



15%





















Asset Integrity

Revenue



$       93,456



$           58,350



$            66,826





Gross Profit



$       12,230



$             9,397



$            10,888





Operating income



$         6,538



$             5,880



$              6,473





Operating margin



7%



10%



10%





















Advanced Technologies

Revenue



$       62,709



$           52,855



$            64,440





Gross Profit



$         7,723



$             6,313



$              9,688





Operating income



$         3,509



$             2,517



$              5,215





Operating margin



6%



5%



8%





















Unallocated Expenses

Gross Profit



$      (21,734)



$         (19,435)



$          (21,521)





Operating income



$      (28,070)



$         (25,455)



$          (31,832)





















TOTAL

Revenue



$     594,893



$         470,420



$          574,197





Gross Profit



$     123,303



$           98,801



$          130,746





Operating income



$       75,987



$           61,067



$            82,468





Operating margin



13%



13%



14%



















SELECTED CASH FLOW INFORMATION















Capital expenditures, including acquisitions



$       92,677



$         109,492



$          308,998



Depreciation and amortization



$       40,588



$           35,437



$            38,479



















The above should be read in conjunction with the Company's latest Annual Report on Form 10-K.





RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION























For the Three Months Ended







Mar. 31,



Mar. 31,



Dec. 31,







2012



2011



2011







(in thousands)

Earnings Before Interest, Taxes, Depreciation and













Amortization (EBITDA)















Net Income



$       51,455



$           42,070



$            58,317



Depreciation and Amortization



40,588



35,437



38,479



















Subtotal



92,043



77,507



96,796



















Interest (Income)/Expense, Net



201



(20)



(78)



Provision for Income Taxes



23,662



19,346



26,880



















EBITDA



$     115,906



$           96,833



$          123,598























































2012 Estimates



























Low



High











(in thousands)























Net Income



$     265,000



$         290,000







Depreciation and Amortization



165,000



175,000























Subtotal



430,000



465,000























Interest (Income)/Expense, Net



-



-







Provision for Income Taxes



120,000



135,000























EBITDA



$     550,000



$         600,000





SOURCE Oceaneering International, Inc.

Copyright 2012 PR Newswire



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