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Oceaneering International (OII) Up 4.3% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Oceaneering International (OII - Free Report) . Shares have added about 4.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Oceaneering International due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Second-Quarter 2018 Results
Oceaneering International reported second-quarter 2018 adjusted loss of 23 cents per share, narrower than the Zacks Consensus Estimate of loss of 26 cents. However, the bottom line compares unfavorably with the prior-year quarter earnings of 2 cents per share.
Total revenues of $478.7 million topped the Zacks Consensus Estimate of $446 million. However, the top line declined about 7% from $515 million in the prior-year quarter.
Segmental Information
Remotely Operated Vehicles: This segment’s revenues were $107.4 million compared with $103.4 million in second-quarter 2017. The segment generated operating earnings of around $4.5 million compared with operating income of $10.4 million in the year-ago quarter. The results were adversely impacted by a shift in geographic mix, along with higher costs related to reactivation and mobilization of remotely operated vehicles.
Subsea Products: The segment’s revenues declined to $121.7 million from the prior-year quarter’s figure of $174.9 million. Operating income tumbled 78.2% to $2.3 million from $10.5 million generated in the second quarter of 2017. This deterioration was a result of reduced activities and increasing costs. Notably, the backlog of the segment came in at $245 million.
Subsea Projects: Revenues from this segment amounted to $78 million compared with $75.5 million recorded in the year-ago quarter. The segment incurred an operating loss of $10.4 million, backsliding from the operating income of $3 million recorded a year ago. Lower-than-expected margins and delayed projects affected the segment’s performance.
Asset Integrity: The segment’s revenues totaled $67.4 million, higher than the year-ago quarter’s recorded figure of $58.2 million. However, operating income declined to $3.4 million as a result of cost inefficiency from $3.8 million in the prior-year quarter.
Advanced Technologies: Revenues from this segment were around $104.1 million, higher than $103 million in second-quarter 2017 level amid higher government related work. As such, operating income rose to $7.9 million from $7.6 million in the year-ago quarter.
Balance Sheet
Capital expenditure in the second quarter was $27.8 million.
As of Jun 30, 2018, Oceaneering had cash and cash equivalents of $769.8 million and long-term debt of around $782.2 million. The debt-to-capitalization ratio of the company was 33.2%.
Updated Guidance
The company updated its full-year 2018 guidance and now expects EBITDA within $140-$160 million compared with the prior guidance band of $140-$180 million. At the midpoint of this range, the EBITDA would represent a 43.3% decline from 2017 levels.
Oceaneering now anticipates its capital expenditure between $100 million and $140 million compared with the prior guidance of $80-$100 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Oceaneering International has a poor Growth Score of F, however its momentum is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Oceaneering International has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Oceaneering International (OII) Up 4.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Oceaneering International (OII - Free Report) . Shares have added about 4.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Oceaneering International due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Second-Quarter 2018 Results
Oceaneering International reported second-quarter 2018 adjusted loss of 23 cents per share, narrower than the Zacks Consensus Estimate of loss of 26 cents. However, the bottom line compares unfavorably with the prior-year quarter earnings of 2 cents per share.
Total revenues of $478.7 million topped the Zacks Consensus Estimate of $446 million. However, the top line declined about 7% from $515 million in the prior-year quarter.
Segmental Information
Remotely Operated Vehicles: This segment’s revenues were $107.4 million compared with $103.4 million in second-quarter 2017. The segment generated operating earnings of around $4.5 million compared with operating income of $10.4 million in the year-ago quarter. The results were adversely impacted by a shift in geographic mix, along with higher costs related to reactivation and mobilization of remotely operated vehicles.
Subsea Products: The segment’s revenues declined to $121.7 million from the prior-year quarter’s figure of $174.9 million. Operating income tumbled 78.2% to $2.3 million from $10.5 million generated in the second quarter of 2017. This deterioration was a result of reduced activities and increasing costs. Notably, the backlog of the segment came in at $245 million.
Subsea Projects: Revenues from this segment amounted to $78 million compared with $75.5 million recorded in the year-ago quarter. The segment incurred an operating loss of $10.4 million, backsliding from the operating income of $3 million recorded a year ago. Lower-than-expected margins and delayed projects affected the segment’s performance.
Asset Integrity: The segment’s revenues totaled $67.4 million, higher than the year-ago quarter’s recorded figure of $58.2 million. However, operating income declined to $3.4 million as a result of cost inefficiency from $3.8 million in the prior-year quarter.
Advanced Technologies: Revenues from this segment were around $104.1 million, higher than $103 million in second-quarter 2017 level amid higher government related work. As such, operating income rose to $7.9 million from $7.6 million in the year-ago quarter.
Balance Sheet
Capital expenditure in the second quarter was $27.8 million.
As of Jun 30, 2018, Oceaneering had cash and cash equivalents of $769.8 million and long-term debt of around $782.2 million. The debt-to-capitalization ratio of the company was 33.2%.
Updated Guidance
The company updated its full-year 2018 guidance and now expects EBITDA within $140-$160 million compared with the prior guidance band of $140-$180 million. At the midpoint of this range, the EBITDA would represent a 43.3% decline from 2017 levels.
Oceaneering now anticipates its capital expenditure between $100 million and $140 million compared with the prior guidance of $80-$100 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Oceaneering International has a poor Growth Score of F, however its momentum is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Oceaneering International has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.