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Oceaneering's Q4 Earnings Miss Estimates, Revenues Beat
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Oceaneering International, Inc. (OII - Free Report) reported an adjusted profit of 37 cents per share for the fourth quarter of 2024, which missed the Zacks Consensus Estimate of 45 cents. This was due to lower-than-expected operating income from the company’s Manufactured Products, Aerospace and Defense Technologies, and Integrity Management & Digital Solutions segments.
However, the bottom line was above the year-ago quarter’s reported figure of 19 cents. This can be attributed to year-over-year strong operating income from certain segments — Subsea Robotics and Offshore Projects Group segments.
Total revenues were $713 million, which beat the Zacks Consensus Estimate of $682 million and increased approximately 8.9% from the year-ago quarter’s $655 million due to strong revenue contributions from OII's segments.
The company repurchased 825,427 shares for approximately $20 million. OII bought back 403,198 shares in the fourth quarter for around $10.1 million.
In this quarter, the company reported a slight decline in Remotely Operated Vehicle (“ROV”) fleet utilization from 68% to 66%. However, the impact of fewer days utilized was more than offset by a 12% year-over-year increase in the average revenue per day per ROV, which rose to $10,786.
In the fourth quarter of 2024, the company reported an operating income of $77.9 million. This indicated a 64% increase compared with the previous year.
Houston, TX-based oil and gas equipment and services company achieved net income of $56.1 million, representing 26% year-over-year growth. Adjusted EBITDA for the quarter was $102 million, marking a 35% increase from the prior year. OII generated $128 million in cash flow from operating activities. Free cash flow for the quarter was $94.5 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 $212.2 million compared with the year-ago quarter’s $199.5 million. However, the top line missed our estimate of $214.1 million.
The segment also reported an operating income of $63.5 million compared with $50.6 million a year ago. The figure was also higher than our estimate of $62.5 million.
Manufactured Products: The segment focuses on the manufactured products business, theme park entertainment systems and automated guided vehicles.
Revenues amounted to $143 million, up substantially from the prior-year figure of $133 million. However, the top line missed our estimate of $149 million.
The segment posted an operating profit of $4.2 million in the fourth quarter, down from the year-ago quarter’s $5.4 million. Moreover, the reported figure missed our estimate of $7.3 million.
Additionally, the backlog decreased to $604 million as of Dec. 31, 2024, from $622 million as of Dec. 31, 2023.
Offshore Projects Group: This segment involves Oceaneering’s former Subsea Projects unit, excluding survey services and global data solutions, the service and rental business, and ROV tooling.
Revenues increased about 14.4% to $184.4 million from $161.2 million in the year-ago quarter. Moreover, the figure beat our estimate of $149.1 million.
The unit’s operating income totaled $39.3 million compared with the prior-year quarter’s $15.2 million. The figure beat our estimate of $23.7 million.
Integrity Management & Digital Solutions: This segment covers Oceaneering’s Asset Integrity unit, along with its global data solutions business.
Revenues of $75.1 million increased from the year-ago quarter’s $66 million. Additionally, the figure beat our estimate of $72.6 million.
The segment reported an operating income of $2 million, down from the prior-year quarter’s $3.2 million. However, the figure beat our estimate of $1 million.
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 $98.8 million, up from $94.9 million recorded in the fourth quarter of 2023. The figure beat our estimate of $97 million.
The operating income dropped to $9.9 million from $11 million in the year-ago quarter and missed our estimate of $11 million.
OII’s Capital Expenditure & Balance Sheet
The capital expenditure in the fourth quarter, including acquisitions, totaled $61 million.
As of Dec. 31, 2024, OII had cash and cash equivalents worth $497.5 million and $461.6 million, respectively, along with a long-term debt of about $482 million. The debt-to-total capital was 40.1%.
The company anticipates growth across several key segments for the first quarter of 2025. Specifically, Subsea Robotics is expected to see a significant increase in both revenues and operating profitability compared with first-quarter 2024. Manufactured Products revenues and profitability are expected to remain stable, while Offshore Projects Group is anticipated to experience a notable improvement in both metrics during the same period.
The Integrity Management & Digital Solutions segment and the Aerospace & Defense Technologies segment are forecasted to maintain flat revenues and operating profitability compared with first-quarter 2024. Unallocated expenses are expected to total around $45 million.
For 2025, the company expects net income to be between $160 million and $190 million, with consolidated EBITDA anticipated between $380 million and $430 million. Free cash flow is expected to fall between $110 million and $130 million, while capital expenditures are anticipated to be in the range of $130 million to $140 million, which includes $15-$20 million for the implementation of a new ERP system.
Looking ahead, the company is focused on strong growth throughout 2025 and beyond. This includes driving revenue and operating income increases across all operating segments. The company will also continue integrating Global Design Innovation Ltd., a UK-based digital and software services provider acquired in the fourth quarter, and will explore additional market expansion opportunities. The company’s year-end backlog and sales pipeline are expected to be key growth drivers in 2025. However, due to rising geopolitical uncertainties, the company has adjusted the lower end of its EBITDA guidance.
Important Earnings at a Glance
While we have discussed OII’s fourth-quarter results in detail, let us take a look at three other key reports of this space.
Oil and gas equipment and services provider Liberty Energy (LBRT - Free Report) reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, due to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Another oil and gas equipment and services provider Halliburton Company (HAL - Free Report) posted a fourth-quarter 2024 adjusted net income per share of 70 cents, same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers indicated softer activity in the region of North America, partly offset by improved fluid work in the Gulf of Mexico.
As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.
Energy infrastructure provider Kinder Morgan (KMI - Free Report) reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.
As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.
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Oceaneering's Q4 Earnings Miss Estimates, Revenues Beat
Oceaneering International, Inc. (OII - Free Report) reported an adjusted profit of 37 cents per share for the fourth quarter of 2024, which missed the Zacks Consensus Estimate of 45 cents. This was due to lower-than-expected operating income from the company’s Manufactured Products, Aerospace and Defense Technologies, and Integrity Management & Digital Solutions segments.
However, the bottom line was above the year-ago quarter’s reported figure of 19 cents. This can be attributed to year-over-year strong operating income from certain segments — Subsea Robotics and Offshore Projects Group segments.
Total revenues were $713 million, which beat the Zacks Consensus Estimate of $682 million and increased approximately 8.9% from the year-ago quarter’s $655 million due to strong revenue contributions from OII's segments.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The company repurchased 825,427 shares for approximately $20 million. OII bought back 403,198 shares in the fourth quarter for around $10.1 million.
In this quarter, the company reported a slight decline in Remotely Operated Vehicle (“ROV”) fleet utilization from 68% to 66%. However, the impact of fewer days utilized was more than offset by a 12% year-over-year increase in the average revenue per day per ROV, which rose to $10,786.
In the fourth quarter of 2024, the company reported an operating income of $77.9 million. This indicated a 64% increase compared with the previous year.
Houston, TX-based oil and gas equipment and services company achieved net income of $56.1 million, representing 26% year-over-year growth. Adjusted EBITDA for the quarter was $102 million, marking a 35% increase from the prior year. OII generated $128 million in cash flow from operating activities. Free cash flow for the quarter was $94.5 million.
Oceaneering International, Inc. Price, Consensus and EPS Surprise
Oceaneering International, Inc. price-consensus-eps-surprise-chart | Oceaneering International, Inc. Quote
Segmental Information of Oceaneering
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 $212.2 million compared with the year-ago quarter’s $199.5 million. However, the top line missed our estimate of $214.1 million.
The segment also reported an operating income of $63.5 million compared with $50.6 million a year ago. The figure was also higher than our estimate of $62.5 million.
Manufactured Products: The segment focuses on the manufactured products business, theme park entertainment systems and automated guided vehicles.
Revenues amounted to $143 million, up substantially from the prior-year figure of $133 million. However, the top line missed our estimate of $149 million.
The segment posted an operating profit of $4.2 million in the fourth quarter, down from the year-ago quarter’s $5.4 million. Moreover, the reported figure missed our estimate of $7.3 million.
Additionally, the backlog decreased to $604 million as of Dec. 31, 2024, from $622 million as of Dec. 31, 2023.
Offshore Projects Group: This segment involves Oceaneering’s former Subsea Projects unit, excluding survey services and global data solutions, the service and rental business, and ROV tooling.
Revenues increased about 14.4% to $184.4 million from $161.2 million in the year-ago quarter. Moreover, the figure beat our estimate of $149.1 million.
The unit’s operating income totaled $39.3 million compared with the prior-year quarter’s $15.2 million. The figure beat our estimate of $23.7 million.
Integrity Management & Digital Solutions: This segment covers Oceaneering’s Asset Integrity unit, along with its global data solutions business.
Revenues of $75.1 million increased from the year-ago quarter’s $66 million. Additionally, the figure beat our estimate of $72.6 million.
The segment reported an operating income of $2 million, down from the prior-year quarter’s $3.2 million. However, the figure beat our estimate of $1 million.
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 $98.8 million, up from $94.9 million recorded in the fourth quarter of 2023. The figure beat our estimate of $97 million.
The operating income dropped to $9.9 million from $11 million in the year-ago quarter and missed our estimate of $11 million.
OII’s Capital Expenditure & Balance Sheet
The capital expenditure in the fourth quarter, including acquisitions, totaled $61 million.
As of Dec. 31, 2024, OII had cash and cash equivalents worth $497.5 million and $461.6 million, respectively, along with a long-term debt of about $482 million. The debt-to-total capital was 40.1%.
Outlook of Oceaneering
This Zacks Rank #3 (Hold) company has updated its full-year guidance and has introduced initial estimates for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company anticipates growth across several key segments for the first quarter of 2025. Specifically, Subsea Robotics is expected to see a significant increase in both revenues and operating profitability compared with first-quarter 2024. Manufactured Products revenues and profitability are expected to remain stable, while Offshore Projects Group is anticipated to experience a notable improvement in both metrics during the same period.
The Integrity Management & Digital Solutions segment and the Aerospace & Defense Technologies segment are forecasted to maintain flat revenues and operating profitability compared with first-quarter 2024. Unallocated expenses are expected to total around $45 million.
For 2025, the company expects net income to be between $160 million and $190 million, with consolidated EBITDA anticipated between $380 million and $430 million. Free cash flow is expected to fall between $110 million and $130 million, while capital expenditures are anticipated to be in the range of $130 million to $140 million, which includes $15-$20 million for the implementation of a new ERP system.
Looking ahead, the company is focused on strong growth throughout 2025 and beyond. This includes driving revenue and operating income increases across all operating segments. The company will also continue integrating Global Design Innovation Ltd., a UK-based digital and software services provider acquired in the fourth quarter, and will explore additional market expansion opportunities. The company’s year-end backlog and sales pipeline are expected to be key growth drivers in 2025. However, due to rising geopolitical uncertainties, the company has adjusted the lower end of its EBITDA guidance.
Important Earnings at a Glance
While we have discussed OII’s fourth-quarter results in detail, let us take a look at three other key reports of this space.
Oil and gas equipment and services provider Liberty Energy (LBRT - Free Report) reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, due to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Another oil and gas equipment and services provider Halliburton Company (HAL - Free Report) posted a fourth-quarter 2024 adjusted net income per share of 70 cents, same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers indicated softer activity in the region of North America, partly offset by improved fluid work in the Gulf of Mexico.
As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.
Energy infrastructure provider Kinder Morgan (KMI - Free Report) reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.
As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.