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Oceaneering (OII) Q2 Earnings Lag Estimates, Revenues Beat
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Oceaneering International, Inc. (OII - Free Report) reported adjusted profit of 28 cents per share for the second quarter of 2024, missing the Zacks Consensus Estimate of 37 cents. This was due to lower-than-expected operating income from the company’s Offshore Projects Group, Integrity Management & Digital Solutions, and Aerospace and Defense Technologies segments.
However, the bottom line surpassed the year-ago quarter’s reported figure of 18 cents. This can be attributed to year-over-year strong operating income from certain segments — Subsea Robotics, and Manufactured Products.
Total revenues were $668.8 million, which beat the Zacks Consensus Estimate of $665 million and increased approximately 11.9% from the year-ago quarter’s level of $597.9 million.
Oceaneering International, Inc. Price, Consensus and EPS Surprise
Subsea Robotics: The unit provides remotely operated submersible vehicles for drill support, vessel-based inspection, subsea hardware installation, pipeline surveys and maintenance services.
Revenues totaled $215 million compared with the year-ago quarter’s figure of $186.5 million. The top line surpassed our projection of $207.7 million. The segment also reported an operating income of $61.8 million compared with $42.2 million a year ago. The figure was higher than our estimate of $45.6 million.
Manufactured Products: The segment focuses on the manufactured products business, theme park entertainment systems and automated guided vehicles.
Revenues amounted to $139.3 million, up substantially from the prior-year figure of $124.9 million. The top line beat our projection of $137.2 million. Moreover, the segment posted an operating profit of about $14.4 million in the first quarter, up from the year-ago quarter’s level of $10.6 million. The reported figure beat our estimate of $13.6 million. Meanwhile, the backlog rose to $713 million as of Jun 30, 2024, from $418 million as of Jun 30, 2023.
Offshore Projects Group: This segment involves Oceaneering’s former Subsea Projects unit, excluding survey services and global data solutions, and the service and rental business, excluding ROV tooling.
Revenues increased about 10.3% to $144.1 million from $130.5 million in the year-ago quarter. However, the figure missed our projection of $146.4 million. The unit’s operating income totaled $13.2 million compared with the prior-year quarter’s level of $17.1 million. The figure also missed our estimate of $18 million.
Integrity Management & Digital Solutions: This segment covers Oceaneering’s Asset Integrity unit, along with its global data solutions business.
Revenues of $73.5 million increased from the year-ago quarter’s reported figure of $63.2 million. However, the figure missed our projection of $82.3 million. The segment reported an operating income of $3.5 million, down from the prior-year quarter’s figure of $3.8 million, but in line with our estimate.
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 $97 million, up from $92.8 million recorded in the second quarter of 2023. However, the figure missed our estimate of $102.7 million.The operating income dropped to $7.2 million from $11.4 million in the year-ago quarter and missed our estimate of $12.6 million.
Capital Expenditure & Balance Sheet
The capital expenditure in the second quarter, including acquisitions, totaled $22.9 million. As of Jun 30, 2024, OII had cash and cash equivalents worth $382.9 million and $461.6 million, respectively, along with a long-term debt of about $479.4 million. The debt-to-total capital was 42.2%.
Outlook
For the third quarter of 2024, Oceaneering anticipates slight improvements in activity levels and operating profitability for the Subsea Robotics segment. Manufactured Products revenues are expected to be higher, albeit with lower operating profitability. The Offshore Projects Group segment is projected to maintain similar revenues to the previous quarter but with significantly higher operating profitability.
The Integrity Management & Digital Solutions segment is expected to see relatively flat activity levels and operating profitability. Aerospace and Defense Technologies segment revenues are projected to remain flat, with significantly higher operating profitability. Unallocated expenses are forecasted to be around $40 million in the same period.
The company also anticipates continued sequential improvement in operating results, with EBITDA expected to range between $95 million and $105 million, driven by a low to mid-single-digit percentage increase in revenues in the same time frame.
This Zacks Rank #3 (Hold) company expects full-year 2024 consolidated adjusted EBITDA to be between $340 million and $370 million, with net income anticipated to range from $130 million to $150 million. Additionally, the operating income and margins for the Aerospace and Defense Technologies segment are expected to be lower compared to 2023.
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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Oceaneering (OII) Q2 Earnings Lag Estimates, Revenues Beat
Oceaneering International, Inc. (OII - Free Report) reported adjusted profit of 28 cents per share for the second quarter of 2024, missing the Zacks Consensus Estimate of 37 cents. This was due to lower-than-expected operating income from the company’s Offshore Projects Group, Integrity Management & Digital Solutions, and Aerospace and Defense Technologies segments.
However, the bottom line surpassed the year-ago quarter’s reported figure of 18 cents. This can be attributed to year-over-year strong operating income from certain segments — Subsea Robotics, and Manufactured Products.
Total revenues were $668.8 million, which beat the Zacks Consensus Estimate of $665 million and increased approximately 11.9% from the year-ago quarter’s level of $597.9 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 totaled $215 million compared with the year-ago quarter’s figure of $186.5 million. The top line surpassed our projection of $207.7 million. The segment also reported an operating income of $61.8 million compared with $42.2 million a year ago. The figure was higher than our estimate of $45.6 million.
Manufactured Products: The segment focuses on the manufactured products business, theme park entertainment systems and automated guided vehicles.
Revenues amounted to $139.3 million, up substantially from the prior-year figure of $124.9 million. The top line beat our projection of $137.2 million. Moreover, the segment posted an operating profit of about $14.4 million in the first quarter, up from the year-ago quarter’s level of $10.6 million. The reported figure beat our estimate of $13.6 million. Meanwhile, the backlog rose to $713 million as of Jun 30, 2024, from $418 million as of Jun 30, 2023.
Offshore Projects Group: This segment involves Oceaneering’s former Subsea Projects unit, excluding survey services and global data solutions, and the service and rental business, excluding ROV tooling.
Revenues increased about 10.3% to $144.1 million from $130.5 million in the year-ago quarter. However, the figure missed our projection of $146.4 million. The unit’s operating income totaled $13.2 million compared with the prior-year quarter’s level of $17.1 million. The figure also missed our estimate of $18 million.
Integrity Management & Digital Solutions: This segment covers Oceaneering’s Asset Integrity unit, along with its global data solutions business.
Revenues of $73.5 million increased from the year-ago quarter’s reported figure of $63.2 million. However, the figure missed our projection of $82.3 million. The segment reported an operating income of $3.5 million, down from the prior-year quarter’s figure of $3.8 million, but in line with our estimate.
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 $97 million, up from $92.8 million recorded in the second quarter of 2023. However, the figure missed our estimate of $102.7 million.The operating income dropped to $7.2 million from $11.4 million in the year-ago quarter and missed our estimate of $12.6 million.
Capital Expenditure & Balance Sheet
The capital expenditure in the second quarter, including acquisitions, totaled $22.9 million. As of Jun 30, 2024, OII had cash and cash equivalents worth $382.9 million and $461.6 million, respectively, along with a long-term debt of about $479.4 million. The debt-to-total capital was 42.2%.
Outlook
For the third quarter of 2024, Oceaneering anticipates slight improvements in activity levels and operating profitability for the Subsea Robotics segment. Manufactured Products revenues are expected to be higher, albeit with lower operating profitability. The Offshore Projects Group segment is projected to maintain similar revenues to the previous quarter but with significantly higher operating profitability.
The Integrity Management & Digital Solutions segment is expected to see relatively flat activity levels and operating profitability. Aerospace and Defense Technologies segment revenues are projected to remain flat, with significantly higher operating profitability. Unallocated expenses are forecasted to be around $40 million in the same period.
The company also anticipates continued sequential improvement in operating results, with EBITDA expected to range between $95 million and $105 million, driven by a low to mid-single-digit percentage increase in revenues in the same time frame.
This Zacks Rank #3 (Hold) company expects full-year 2024 consolidated adjusted EBITDA to be between $340 million and $370 million, with net income anticipated to range from $130 million to $150 million. Additionally, the operating income and margins for the Aerospace and Defense Technologies segment are expected to be lower compared to 2023.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.