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Why Is Oceaneering International (OII) Down 6.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Oceaneering International (OII - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Oceaneering International due for a breakout? 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 catalysts.
Oceaneering Q3 Earnings Beat Estimates
Oceaneering International reported third-quarter 2023 adjusted profit of 38 cents per share, which beat the Zacks Consensus Estimate of 27 cents. The bottom line also outpaced the year-ago quarter’s figure of 23 cents. This outperformance was largely due to robust results in certain segments.
Total revenues were $635.2 million, which missed the Zacks Consensus Estimate of $638 million due to a decrease in year-over-year sales in OII’s Offshore Projects Group segment. The top line, however, increased approximately 13.5% from the year-ago quarter’s level of $559.7 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 totaled $197.3 million compared with the year-ago quarter’s figure of $169.4 million. The top line missed our projection of $198 million.
The segment also reported an operating income of $47.8 million compared with $37.1 million a year ago. The figure was also higher than our estimate of $44.4 million.
Manufactured Products: The segment focuses on the manufactured products business, theme park entertainment systems and automated guided vehicles.
Revenues amounted to $122.9 million, up substantially from the prior-year figure of $94 million. The figure missed our projection of $144.1 million. Moreover, the segment posted an operating profit of about $8.2 million in the third quarter, up from the year-ago quarter’s level of $4.3. The figure was higher than our estimate of $5.3 million. Meanwhile, the backlog rose to $556 million as of Sep 30, 2023 from $365 million as of Sep 30, 2022.
Offshore Projects Group: This involves Oceaneering’s former Subsea Projects segment, excluding survey services and global data solutions, and the service and rental business, excluding ROV tooling.
Revenues decreased about 1.8% to $150.3 million from $153 million in the year-ago quarter. The figure outpaced our projection of $137.2 million. The unit’s operating income of $26.7 million compared favorably with the prior-year quarter’s level of $20.3 million. The figure was also higher than our estimate of $17.3 million.
Integrity Management & Digital Solutions: This segment mainly covers Oceaneering’s Asset Integrity segment along with its global data solutions business.
Revenues of $66.1 million went up from the year-ago quarter’s reported figure of $58.5 million. The figure outpaced our projection of $62.6 million. Moreover, the segment reported an operating income of $3.2 million, up from the prior-year quarter’s figure of $3.1 million. The figure, however, missed our estimate of $6.7 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 $98.6 million, indicating an increase from $84.8 million recorded in the third quarter of 2022. The figure was also higher than our estimate of $93.9 million. As a result, the operating income rose to $14.1 million from $13 million in the year-ago quarter. The figure, however, missed our estimate of $17 million.
Capital Expenditure & Balance Sheet
The capital expenditure in the third quarter, including acquisitions, totaled $25.9 million. As of Sep 30, 2023, OII had cash and cash equivalents worth $556.4 million and $568.7 million, respectively, along with a long-term debt of about $568.5 million. The debt-to-total capital was 49.8%.
Outlook
Oceaneering anticipates a decline in fourth-quarter 2023 EBITDA on relatively flat revenues compared with the third-quarter results. The company anticipates a revised organic capital expenditure range of $95-$105 million for fourth-quarter 2023. It also expects revised cash income tax payments in the band of $70-$75 million during the same period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -8.33% due to these changes.
VGM Scores
At this time, Oceaneering International has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Oceaneering International has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Oceaneering International (OII) Down 6.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Oceaneering International (OII - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Oceaneering International due for a breakout? 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 catalysts.
Oceaneering Q3 Earnings Beat Estimates
Oceaneering International reported third-quarter 2023 adjusted profit of 38 cents per share, which beat the Zacks Consensus Estimate of 27 cents. The bottom line also outpaced the year-ago quarter’s figure of 23 cents. This outperformance was largely due to robust results in certain segments.
Total revenues were $635.2 million, which missed the Zacks Consensus Estimate of $638 million due to a decrease in year-over-year sales in OII’s Offshore Projects Group segment. The top line, however, increased approximately 13.5% from the year-ago quarter’s level of $559.7 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 totaled $197.3 million compared with the year-ago quarter’s figure of $169.4 million. The top line missed our projection of $198 million.
The segment also reported an operating income of $47.8 million compared with $37.1 million a year ago. The figure was also higher than our estimate of $44.4 million.
Manufactured Products: The segment focuses on the manufactured products business, theme park entertainment systems and automated guided vehicles.
Revenues amounted to $122.9 million, up substantially from the prior-year figure of $94 million. The figure missed our projection of $144.1 million. Moreover, the segment posted an operating profit of about $8.2 million in the third quarter, up from the year-ago quarter’s level of $4.3. The figure was higher than our estimate of $5.3 million. Meanwhile, the backlog rose to $556 million as of Sep 30, 2023 from $365 million as of Sep 30, 2022.
Offshore Projects Group: This involves Oceaneering’s former Subsea Projects segment, excluding survey services and global data solutions, and the service and rental business, excluding ROV tooling.
Revenues decreased about 1.8% to $150.3 million from $153 million in the year-ago quarter. The figure outpaced our projection of $137.2 million. The unit’s operating income of $26.7 million compared favorably with the prior-year quarter’s level of $20.3 million. The figure was also higher than our estimate of $17.3 million.
Integrity Management & Digital Solutions: This segment mainly covers Oceaneering’s Asset Integrity segment along with its global data solutions business.
Revenues of $66.1 million went up from the year-ago quarter’s reported figure of $58.5 million. The figure outpaced our projection of $62.6 million. Moreover, the segment reported an operating income of $3.2 million, up from the prior-year quarter’s figure of $3.1 million. The figure, however, missed our estimate of $6.7 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 $98.6 million, indicating an increase from $84.8 million recorded in the third quarter of 2022. The figure was also higher than our estimate of $93.9 million. As a result, the operating income rose to $14.1 million from $13 million in the year-ago quarter. The figure, however, missed our estimate of $17 million.
Capital Expenditure & Balance Sheet
The capital expenditure in the third quarter, including acquisitions, totaled $25.9 million. As of Sep 30, 2023, OII had cash and cash equivalents worth $556.4 million and $568.7 million, respectively, along with a long-term debt of about $568.5 million. The debt-to-total capital was 49.8%.
Outlook
Oceaneering anticipates a decline in fourth-quarter 2023 EBITDA on relatively flat revenues compared with the third-quarter results. The company anticipates a revised organic capital expenditure range of $95-$105 million for fourth-quarter 2023. It also expects revised cash income tax payments in the band of $70-$75 million during the same period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -8.33% due to these changes.
VGM Scores
At this time, Oceaneering International has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Oceaneering International has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.