Oceaneering International Inc. (OII) filed Quarterly Report for the period ended 2009-09-30.
OCEANEERING INTERNATIONAL INC. is an advanced applied technology company that provides engineered services and hardware to customers who operate in marine space and other harsh environments. The company supplies a comprehensive range of integrated technical services to a wide array of industries and is one of the world's largest underwater services contractors. Oceaneering International Inc. has a market cap of $2.92 billion; its shares were traded at around $53.15 with a P/E ratio of 15.2 and P/S ratio of 1.5. Oceaneering International Inc. had an annual average earning growth of 38.8% over the past 10 years. GuruFocus rated Oceaneering International Inc. the business predictability rank of 3.5-star.
Highlight of Business Operations:
For the full year of 2009, we anticipate our diluted earnings per share to be in the range of $3.32 to $3.38, as compared to $3.56 in 2008 (as restated to comply with accounting rules taking effect in 2009, see Note 5 of our Notes to Consolidated Financial Statements contained in Item 1 of this quarterly report on Form 10-Q), with an increase in ROV operating income and decreases in our other oilfield segments’ operating results.
plan to add five to seven more new ROVs during the rest of 2009, and these are in the process of being built or installed. Our total ROV segment capital expenditures were $124 million for the first nine months of 2009. Our capital expenditures in the nine months ended September 30, 2008 included $100 million in our ROV segment and $75 million within our Subsea Products segment, of which approximately $40 million was for the acquisition of GTO Subsea AS (“GTO”). GTO is a rental provider of specialized subsea dredging and excavation equipment, including ROV-deployed units, to the offshore oil and gas industry.
At September 30, 2009, we had long-term debt of $120 million and a 9% debt-to-total capitalization ratio. We have $20 million of Senior Notes outstanding, to be repaid in September 2010 and $100 million outstanding under our $300 million revolving credit facility, which is scheduled to expire in January 2012. The revolving credit facility has short-term interest rates that float with market rates, plus applicable spreads. The amount available under the revolving credit facility can be increased to $450 million upon our agreement with the existing or additional lenders, although we believe this is unlikely in the near-term due to the current condition of the credit markets.
In September 2008, we entered into a one-year, unsecured, $85 million term loan agreement. In October 2008, we borrowed the entire $85 million available under the agreement and applied the proceeds to repay borrowings under our revolving credit agreement. During the nine months ended September 30, 2009, we paid the term loan. In September 2009, we entered into a $200 million agreement with Prudential Investment Management, Inc., under which we may, subject to mutual agreement, borrow at fixed rates for up to 13 years with weighted average maturities of no more than 10 years. As of September 30, 2009, we had not borrowed under the agreement with Prudential.
For the three- and nine-month periods of 2009 compared to the corresponding periods of the prior year, our Subsea Products revenue, operating income and operating income margin percentages declined on lower umbilical plant throughput. Operating income and margin percentages were also adversely affected by $5.5 million of unexpected costs we incurred in the third quarter on two blowout preventer (BOP) control systems that are in the final stages of manufacture. We expect to deliver one of these systems in the fourth quarter of 2009 and the other in the first quarter of 2010. Our Subsea Products backlog was $328 million at September 30, 2009 compared to $298 million at December 31, 2008.
In June 2009, we sold the Ocean Pensador, a tanker in our Mobile Offshore Production Systems segment that we had been holding for possible conversion, for $7.2 million and recognized a loss of $0.8 million. During the nine month period ended September 30, 2008, we realized a gain of $2.0 million on the sale of the production barge San Jacinto.
OII is in the portfolios of PRIMECAP Management, Kenneth Fisher of Fisher Asset Management, LLC.
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