Oceaneering International, Inc. reported record earnings for the third quarter ended September 30, 2012. On revenue of $734 million, Oceaneering generated net income of $84.4 million, or $0.78 per share.
For the third quarter of 2011, Oceaneering reported revenue of $602 million and net income of $78.6 million, or $0.72 per share. The 2011 results included an $18.3 million pre-tax gain in Subsea Projects, $11.9 million after tax using an incremental tax rate of 35%, on the sale of a mobile offshore production system and $4.9 million of tax benefits principally related to prior years. For the second quarter of 2012, Oceaneering reported revenue of $673 million and net income of $72.6 million, or $0.67 per share.
Sequentially, quarterly earnings were higher on record operating income from Remotely Operated Vehicles (ROV) and Subsea Products. Year over year, earnings increased on operating income improvements from ROV, Subsea Products, and Asset Integrity.
M. Kevin McEvoy, President and Chief Executive Officer, stated, “Our quarterly performance demonstrates the rising demand we are experiencing for our subsea services and products. Overall, our operations performed within expectations and we remain on track to achieve record EPS for the year.
“Compared to the second quarter of 2012, ROV operating income increased on the strength of higher global demand to provide drill support and vessel-based services. Our ROV days on hire for the quarter increased to an all-time high of over 21,000. Subsea Products operating income improved on increased profit contributions from all of our major product line categories, led by Installation and Workover Control System (IWOCS) services and subsea hardware. Products operating margin for the quarter rose to a record 24%, due to higher profitability on IWOCS services and sales of subsea hardware and umbilicals. Subsea Products backlog at quarter-end was $619 million, comparable to our June 30 backlog of $621 million and up from $403 million one year ago.
“We are narrowing our 2012 EPS guidance range to $2.60 to $2.65, up slightly at the midpoint from last quarter. For the fourth quarter of 2012 we are projecting EPS of $0.68 to $0.73.
“We are initiating 2013 EPS guidance with a range of $3.00 to $3.25, up nearly 20% at the midpoint over our expectation for 2012. 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 escalating, and backlog to perform offshore construction projects are at a record high level.
“Compared to 2012, we anticipate all of our segments will have higher operating income in 2013: ROV on greater service demand to support drilling and vessel-based projects; Subsea Products on higher subsea hardware and tooling sales, and increased throughput at our umbilical plants; and Subsea Projects on a full year of work on the field support services contract for BP 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 remained conservatively capitalized with $104 million of cash, $120 million of debt, and $1.7 billion of equity. We generated EBITDA of $169 million during the quarter and $433 million year to date. For 2012 and 2013, we anticipate generating EBITDA of at least $590 million and $670 million, respectively.
“Looking beyond 2013, 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.”
Press Release, October 30, 2012