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Oceaneering International (OII) Up 29.1% 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 29.1% 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 the most recent earnings report in order to get a better handle on the important drivers.
Oceaneering Q1 Earnings and Sales Top Estimates
Oceaneeringreported first-quarter 2021 adjusted earnings of 3 cents per share, which beat the Zacks Consensus Estimate of a loss of 5 cents per share. The better-than-expected result benefitted from cost-management measures and higher revenue contribution from the Offshore Projects Group segment.
However, the bottom line fell from the year-ago earnings of 4 cents due to lower-than-expected sales from the Aerospace and Defense Technologies, and the Manufactured Products units. Precisely, revenues from the segments totaled $88.3 million and $86.8 million, lagging the Zacks Consensus Estimates of $95 million each.
Oceaneering’s total quarterly revenues of $438 million surpassed the Zacks Consensus Estimate of $433 million but declined 18.4% from the year-ago sales of $537 million.
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 of $119.1 million compared unfavorably with $139.8 million in first-quarter 2020. The segment reported an operating income of $14.6 million. However, the year-ago quarter witnessed a loss of $94.1 million. Meanwhile, days on hire fell 20% year over year to 11,887, while ROV utilization decreased to 53% from 65% a year ago.
Manufactured Products: The segment focuses on manufactured products business, theme park entertainment systems and automated guided vehicles.
The segment’s revenues were $86.8 million, down from the prior-year figure of $166.5 million. However, operating income of $2.8 million increased considerably against the year-ago loss of $66.1 million. The outperformance can be attributed to favorable contract close-outs. Meanwhile, the backlog dropped to $248 million as of Mar 31, 2021.
Offshore Projects Group: The segment involves Oceaneering’s former Subsea Projects segment, excluding survey services and global data solutions, and its service and rental business, excluding ROV tooling.
Revenues increased 20.2% to $89.2 million from $74.3 million in the year-ago quarter. Moreover, the unit’s operating income of $8.8 million increased from the $79.9 million loss reported in first-quarter 2020.
Integrity Management & Digital Solutions: The segment mainly covers the company’s Asset Integrity segment along with its global data solutions business.
Revenues of $54 million declined from the year-ago figure of $64.7 million. However, the segment reported an operating income of $2.5 million against the prior-year loss of $121.5 million as a result of enhanced execution of personnel.
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 from the segment totaled $88.3 million, down from $91.4 million in first-quarter 2020.
Operating income of $16.8 million rose from $13 million in the year-ago quarter on the back of project mix and a better-than-expected performance in its subsea defense technologies business.
Capital Expenditure & Balance Sheet
Capital expenditure in the first quarter, including acquisitions, summed $10.7 million. As of Mar 31, 2021, Oceaneering had cash and cash equivalents worth $442.7 million, and long-term debt of $804.9 million. The total debt to total capital was 59.5%.
Outlook
For 2021, the company expects an adjusted EBITDA of $180-$210 million. Moreover, Oceaneering estimates adjusted EBITDA of $55-$60 million for second-quarter 2021. Further, it maintains its previous organic capex guidance of $50-$70 million (including $35-$40 million of maintenance capex and $15-$30 million of growth capital expenditure). Oceaneering projects unallocated expenses at around $30 million per quarter.
The company anticipates cash tax payments of $40-$45 million for 2021. Also, it hopes to generate a positive free cash flow this year, surpassing the amount generated in 2020.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 109.68% due to these changes.
VGM Scores
At this time, Oceaneering International has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Oceaneering International has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Oceaneering International (OII) Up 29.1% 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 29.1% 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 the most recent earnings report in order to get a better handle on the important drivers.
Oceaneering Q1 Earnings and Sales Top Estimates
Oceaneeringreported first-quarter 2021 adjusted earnings of 3 cents per share, which beat the Zacks Consensus Estimate of a loss of 5 cents per share. The better-than-expected result benefitted from cost-management measures and higher revenue contribution from the Offshore Projects Group segment.
However, the bottom line fell from the year-ago earnings of 4 cents due to lower-than-expected sales from the Aerospace and Defense Technologies, and the Manufactured Products units. Precisely, revenues from the segments totaled $88.3 million and $86.8 million, lagging the Zacks Consensus Estimates of $95 million each.
Oceaneering’s total quarterly revenues of $438 million surpassed the Zacks Consensus Estimate of $433 million but declined 18.4% from the year-ago sales of $537 million.
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 of $119.1 million compared unfavorably with $139.8 million in first-quarter 2020. The segment reported an operating income of $14.6 million. However, the year-ago quarter witnessed a loss of $94.1 million. Meanwhile, days on hire fell 20% year over year to 11,887, while ROV utilization decreased to 53% from 65% a year ago.
Manufactured Products: The segment focuses on manufactured products business, theme park entertainment systems and automated guided vehicles.
The segment’s revenues were $86.8 million, down from the prior-year figure of $166.5 million. However, operating income of $2.8 million increased considerably against the year-ago loss of $66.1 million. The outperformance can be attributed to favorable contract close-outs. Meanwhile, the backlog dropped to $248 million as of Mar 31, 2021.
Offshore Projects Group: The segment involves Oceaneering’s former Subsea Projects segment, excluding survey services and global data solutions, and its service and rental business, excluding ROV tooling.
Revenues increased 20.2% to $89.2 million from $74.3 million in the year-ago quarter. Moreover, the unit’s operating income of $8.8 million increased from the $79.9 million loss reported in first-quarter 2020.
Integrity Management & Digital Solutions: The segment mainly covers the company’s Asset Integrity segment along with its global data solutions business.
Revenues of $54 million declined from the year-ago figure of $64.7 million. However, the segment reported an operating income of $2.5 million against the prior-year loss of $121.5 million as a result of enhanced execution of personnel.
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 from the segment totaled $88.3 million, down from $91.4 million in first-quarter 2020.
Operating income of $16.8 million rose from $13 million in the year-ago quarter on the back of project mix and a better-than-expected performance in its subsea defense technologies business.
Capital Expenditure & Balance Sheet
Capital expenditure in the first quarter, including acquisitions, summed $10.7 million. As of Mar 31, 2021, Oceaneering had cash and cash equivalents worth $442.7 million, and long-term debt of $804.9 million. The total debt to total capital was 59.5%.
Outlook
For 2021, the company expects an adjusted EBITDA of $180-$210 million. Moreover, Oceaneering estimates adjusted EBITDA of $55-$60 million for second-quarter 2021. Further, it maintains its previous organic capex guidance of $50-$70 million (including $35-$40 million of maintenance capex and $15-$30 million of growth capital expenditure). Oceaneering projects unallocated expenses at around $30 million per quarter.
The company anticipates cash tax payments of $40-$45 million for 2021. Also, it hopes to generate a positive free cash flow this year, surpassing the amount generated in 2020.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 109.68% due to these changes.
VGM Scores
At this time, Oceaneering International has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Oceaneering International has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.