Wednesday after the bell, Oceaneering International, Inc. (OII) reported a decline in profit for the third quarter from a year-ago due to lower revenue and unanticipated costs in the production of Subsea products. The company also provided guidance for the fourth quarter 2009 and full year 2010, while revising its guidance for the full year 2009.
Oceaneering's third quarter net profit declined to $49.83 million from $54.97 million last year. On a per share basis, net income decreased to $0.90 from $0.98.
On an average, 15 analysts polled by Thomson Reuters expected earnings of $0.87 for the quarter. Analysts' estimates typically exclude one-time items.
The company attributed the decline in earnings to $5.5 million of unanticipated costs on two BOP control systems related to Subsea Products that are in the final stages of manufacturing. Revenue declined to $484.03 million from $515.79 million in the year-ago period. Analysts expected revenue of $471.38 million.
Segment-wise, Remotely Operate Vehicles contributed revenue of $166 million, compared to $161.7 million last year. Subsea Products revenue declined to $132.7 million from $176 million, while Subsea Projects revenue increased to $65.9 million from $59.8 million a year ago. Inspection revenue declined to $57.6 million from $65.3 million and revenue from Mobile Offshore Production Systems increased to $10.0 million from $9.7 million in the prior year. Advanced Technologies segment contributed revenue of $51.9 million, compared to $43.2 million in the previous year.
Selling, General and Administrative Expense remained almost flat at $37.7 million compared with last year. The company's capital expenditure for the quarter was $55 million, of which $47 million was used to expand and upgrade the remotely operated underwater vehicle or ROV fleet.
For the nine-month period, net income decreased to $142.29 million or $2.57 per share from $148.37 million or $2.64 per share in the year-ago period. Revenue declined to $1.37 billion from $1.45 billion.
For the fourth quarter, the company expects earnings of $0.75 to $0.81 per share and has revised its full year guidance to the range of $3.32 to $3.38 per share. Analysts expect the company to post fourth quarter earnings of $0.85 per share and full-year earnings of $3.39 per share.
The company said that as deepwater drilling activity will increase only with more demand for oil, it is forecasting 2010 earnings per share to be relatively flat with 2009, in the range of $3.25 to $3.55. Wall Street expects the company to post earnings of $3.51 for 2010.
OII stock closed Wednesday's regular trading session at $53.90, down $2.20, on the NYSE. The shares fell further to $53.00, down $0.90, in after-market trading.
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