OII Oceaneering International Inc

HOUSTON, July 23, 2014 /PRNewswire/ -- Oceaneering International, Inc. (NYSE:OII) today reported record quarterly earnings for the second quarter ended June 30, 2014.

On revenue of $927.4 million, Oceaneering generated net income of $110.3 million, or $1.02 per share.  During the corresponding period in 2013, Oceaneering reported revenue of $820.4 million and net income of $98.8 million, or $0.91 per share.

Year over year, quarterly EPS increased on profit improvements from Subsea Products, Remotely Operated Vehicles (ROV), and Subsea Projects.  Sequentially, quarterly EPS rose on higher operating income principally from Subsea Products and Subsea Projects.

M. Kevin McEvoy, President and Chief Executive Officer, stated, "Our quarterly EPS was slightly above our guidance, and was up 21% over the first quarter of this year and 12% over the second quarter of 2013.  EPS for the first half of 2014 was 16% higher than the first half of 2013.  We achieved record quarterly operating income from Subsea Products, and for the first time Subsea Products operating income exceeded that of ROV.

"Our outlook for the second half of this year remains positive and unchanged overall from last quarter.  Given this outlook and our year-to-date performance, we are narrowing our 2014 EPS guidance range to $3.95 to $4.05 from $3.90 to $4.10.  Relative to the first half of 2014, we expect to generate higher income from each of our operating segments during the second half, led by ROV and Subsea Projects.  We continue to forecast year-over-year operating income growth for all of our oilfield segments in 2014.

"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 $850 million, compared to our March 31 backlog of $894 million and $902 million one year ago.  During the quarter we announced one large umbilical contract for offshore Indonesia.

"ROV operating income was essentially flat, as operating margin declined due to higher repair and maintenance expenses, unanticipated startup costs associated with placing new systems in service, and lower fleet utilization.  Revenue grew on increases in days on hire and revenue per day on hire.  During the quarter we put 13 new ROVs into service and retired 4.  At the end of June we had 323 vehicles in our fleet, compared to 296 one year ago.

"During the second half of this year, we expect to place at least 13 new ROVs into service, and we have contracts for all of these.  When these new vehicles are placed into service depends upon the actual commencement dates of new drilling rig and vessel project work.  We now anticipate adding 40 or more new systems to our ROV fleet in 2014.

"Sequentially, Subsea Projects operating income increased largely as a result of adding a vessel, the Bourbon Evolution 803, to our Field Support Vessel Services contract with BP for work offshore Angola and a higher profit contribution from the Ocean Alliance in the U.S. Gulf of Mexico.  The Ocean Alliance was out of service for much of the first quarter undergoing a regulatory drydock inspection.  Asset Integrity operating income improved slightly due to a seasonal increase in activity in Europe and the Caspian Sea area.  Advanced Technologies operating income declined due to execution issues on certain U.S. Navy and industrial projects.

"For the third quarter of 2014, we are projecting EPS of $1.10 to $1.15.  We expect sequential improvements in income from all of our operating business segments, led by ROVs.

"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 $103 million of cash, $80 million of debt, and $2.2 billion of equity.  During the quarter we generated EBITDA of $217 million, $403 million year to date, and for 2014 we anticipate generating at least $855 million.

"In June we increased our regular quarterly cash dividend by 23% to $0.27 from $0.22 per share. This underscores our continued confidence in Oceaneering's financial strength and future business prospects.

"Looking beyond 2014, 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 services and products to safely support the 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:  positive outlook for the rest of this year; 2014 EPS guidance range; forecast of higher income from all oilfield segments in 2014 compared to 2013; expectation of higher operating income in the second half of 2014, relative to the first half of 2014, led by ROV and Subsea Projects; statements about backlog, to the extent backlog may be an indicator of future revenue or profitability; anticipated additions to its ROV fleet in 2014; third quarter EPS guidance range; expectation of sequential quarterly improvements in income from all operating business segments, led by ROV; belief that its liquidity and projected cash flow provide ample resources to invest in the company's growth; anticipated minimum 2014 EBITDA; belief that the oil and gas industry will continue its investment in deepwater projects; and belief that deepwater remains one of the best frontiers for adding large hydrocarbon reserves with high production flow rates at relatively low finding and development costs.  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.  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 risk factors, please see Oceaneering's latest annual report on Form 10-K and quarterly reports on Form 10-Q  filed with the Securities and Exchange Commission.

We define EBITDA as net income plus provision for income taxes, interest 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 our EBITDA amounts to the most directly comparable GAAP financial measures, please see the attached schedule.

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, entertainment, 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, July 24, 2014 at 11:00 a.m. Eastern, can be accessed at www.oceaneering.com/investor-relations/.

SOURCE Oceaneering International, Inc.