Oceaneering Posts Quarterly Loss; Sees 90% Lower Full-Year Profit

Subsea engineering specialist Oceaneering has reported a net loss of $11.0 million, or $(0.11) per share, on revenue of $488 million for the three months ended December 31, 2016.

During the corresponding period in 2015, Oceaneering reported net income of $25.7 million, or $0.28 per share, on revenue of $722 million.

Adjusted net income in the fourth quarter was $2.6 million, or $0.03 per share, excluding $12.9 million of pre-tax charges and an increase in the annual effective income tax rate recognized during the quarter.

To remind, during the prior quarter ended September 30, 2016, Oceaneering reported a net loss of $11.8 million, or $(0.12) per share, on  revenue of $549 million, and adjusted net income of $16.6 million, or $0.17 per share.

For the full year 2016, Oceaneering reported net income of $24.6 million, or $0.25 per share, on revenue of $2.3 billion. This is compared to 2015 net income of $231 million, or $2.34 per share, (decline of close to 90 per cent) on revenue of $3.1 billion.

Oceaneering declared a regular quarterly dividend of $0.15 per common share. The dividend is payable March 17, 2017 to shareholders of record at the close of business on February 24, 2017.

The company said it added one new ROV to its fleet, ending the year with a total of 280 vehicles. Fleet utilization for the fourth quarter was 50%.

Subsea products backlog at December 31, 2016 was $431 million, compared backlog of $457 million at the end of Q3 2016. The backlog decline was primarily related to umbilicals, the company noted.

“Looking forward, we are projecting a further decline in our profitability and to be marginally profitable at the operating income level on a consolidated basis for 2017. Below the operating income line, we are projecting a loss from our equity investment in the Medusa Spar as production has declined, and our interest expense is expected to be slightly higher in 2017 than 2016 due to higher rates and less interest being capitalized.

“Operationally, we anticipate declines in profitability to occur in ROVs and Subsea Products, due primarily to the relatively strong adjusted operating results generated by these segments during the first half of 2016.

“We believe our first quarter 2017 results will be considerably lower than our adjusted fourth quarter results due to a continuation of weak demand for our services and products, exacerbated by seasonality. We expect sequentially lower operating income primarily from our Asset Integrity business segment, and higher Unallocated Expenses. We also expect a discrete additional income tax provision in accordance with a new accounting standard associated with our share based incentive plan,” said M. Kevin McEvoy, chief executive officer of Oceaneering.

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