Oceaneering International, Inc. (“Oceaneering”) (NYSE:OII) today reported net income of $15.1 million, or $0.15 per share, on revenue of $599 million for the three months ended March 31, 2024. Adjusted net income was $13.9 million, or $0.14 per share, reflecting the positive impact of $(2.2) million in foreign exchange gains, and the associated $0.8 million of tax effects, along with $0.2 million of expenses related to discrete tax adjustments.
| Summary of Results | |||||||||
| (in thousands, except per share amounts) | |||||||||
| For the Three Months Ended | |||||||||
| Mar 31, | Dec 31, | ||||||||
| 2024 | 2023 | 2023 | |||||||
| Revenue | $ | 599,092 | $ | 536,987 | $ | 654,629 | |||
| Gross Margin | 92,384 | 77,565 | 105,629 | ||||||
| Income (Loss) from Operations | 36,693 | 26,750 | 47,450 | ||||||
| Net Income (Loss) | 15,135 | 4,060 | 44,529 | ||||||
| Diluted Earnings (Loss) Per Share | $ | 0.15 | $ | 0.04 | $ | 0.43 | |||
For the first quarter of 2024:
- Net income was $15.1 million and consolidated adjusted EBITDA was $61.7 million
- Consolidated operating income was $36.7 million
- Cash flow used in operating activities was $69.7 million and free cash flow was $(95.2) million, with an ending cash position of $355 million
As of March 31, 2024:
- Remotely Operated Vehicles (ROV): fleet count was 250; Q1 utilization was 64%; and Q1 average revenue per day on hire was $10,009
- Manufactured Products backlog was $597 million
Confirmed prior guidance for 2024:
- Net income is expected in the range of $125 million to $155 million
- Consolidated EBITDA is expected in the range of $330 million to $380 million
- Free cash flow generation is expected in the range of $110 million to $150 million
- Capital expenditures are expected in the range of $110 million to $130 million
Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, “We are encouraged by our first quarter 2024 results. Our adjusted EBITDA was higher than guided, on better-than-expected activity levels across our businesses. Compared to the same quarter last year, our consolidated first quarter 2024 operating income was 37% higher on a 12% increase in revenue, with higher revenue in all of our business segments and improved operating income in each segment except for our Offshore Projects Group (OPG). These results, when combined with our backlog and current levels of bidding activity, support our unchanged guidance for the year.”
First Quarter 2024 Segment Results v. First Quarter 2023 Segment Results
Subsea Robotics (SSR) first quarter 2024 operating income of $44.2 million was 31% higher than the first quarter of 2023. EBITDA margin improved to 31%, as compared to the 29% margin achieved in the first quarter of 2023.
Average ROV revenue per day on hire of $10,009 was 9% higher, utilization improved to 64%, and days on hire increased 2% to 14,536. ROV fleet use during the quarter was 66% in drill support and 34% in vessel-based activity, compared to 65% and 35%, respectively, in the first quarter of the prior year.
Manufactured Products operating income improved 17% on a 15% increase in revenue compared to the first quarter of 2023, while operating income margin remained flat at 10%. Backlog was $597 million on March 31, 2024, an increase of $151 million compared to backlog on March 31, 2023. The book-to-bill ratio was 1.30 for the 12-month period ending March 31, 2024, as compared to the book-to-bill ratio of 1.27 for the same period last year.
OPG operating income declined as expected due to drydock expenses incurred during the first quarter of 2024, on an increase in revenue compared to the first quarter of 2023. Operating income margin declined to 1% in the first quarter, from 5% in the first quarter of 2023.
Integrity Management and Digital Solutions (IMDS) operating income improved year over year on a 16% increase in revenue. Operating income margin of 5% was flat.
Aerospace and Defense Technologies (ADTech) operating income increased by $4.3 million. Revenue increased 8% and operating income margin improved to 13% from 9% in the first quarter of 2023.
At the corporate level, Unallocated Expenses of $38 million were below guidance for the quarter but higher than the same period last year.
Second Quarter 2024 Guidance
For the second quarter of 2024, as compared to the first quarter 2024:
- OPG activity levels and operating profitability are expected to be significantly higher;
- SSR and Manufactured Products activity levels and operating profitability are expected to be higher;
- IMDS and ADTech activity levels are expected to be flat and operating profitability is expected to be slightly lower; and
- Unallocated Expenses are forecasted to be in the $40 million range, consistent with prior guidance.
On a consolidated basis, second quarter 2024 operating results are expected to improve, with EBITDA in the range of $80 million to $90 million on a mid-teens percentage increase in revenue.
Updated Full-Year 2024 Guidance
Full-year 2024 consolidated and segment guidance remains the same as provided in the fourth quarter 2023 earnings release, inclusive of the following clarification and addition:
- SSR revenue increase is expected to be in the low- to mid-teens percentage range; and
- Manufactured Products book-to-bill ratio is expected to be in the range of 1.1 to 1.3 for the full year.