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Oceaneering Drops BOP Business

Oceaneering Drops BOP Business

View all news from: Oceaneering International Services Limited
View directory entry for: Oceaneering International Services Limited

24 July 2015

Houston-based Oceaneering International’s 2Q 2015 results has its revenue down nearly 13% year-over-year, and left the company with the decision to end its blowout preventer (BOP) control systems business.

For 2Q 2015, Oceaneering’s revenue came in at US$810.3 million, representing a decrease of 12.6% from 2Q 2014’s $927.4 million, however, the company says the number surpassed what it originally anticipated.

The quarter included the impacts of a $9 million inventory subsea write-down that resulted in Oceaneering’s decision to exit the BOP control manufacturing business due to deteriorating demand prospects, with intentions to continue providing aftermarket parts for the installed base.

"Our operating results during the quarter surpassed what we had anticipated,” Kevin McEvoy, Oceaneering CEO said. "ROV benefited from better-than-expected revenue per day on hire due to more vessel work, and subsea projects profited from higher US Gulf of Mexico demand for deepwater intervention and diving services.”

Quarterly operating income declined on reduced profit contributions from remotely operated vehicles (ROV), subsea products, and asset integrity year-over-year.

Oceaneering is attributing its quarterly earnings fall to the operating income decline, the foreign currency exchange losses, and higher interest expense as a result of indebtedness incurred during 2H 2014.

"Our overall outlook for the second half of this year is down somewhat from last quarter’s guidance, primarily on reduced expectations for subsea products and asset integrity,” said McEvoy. "Relative to the first half of 2015, during the second half we expect to generate higher operating income from subsea products and AdTech, lower ROV and subsea projects results, and a similar operating income contribution from asset integrity.

For the third quarter of 2015, Oceaneering is expecting a sequential quarterly improvement in income from subsea products, and similar or declining profit contributions from our other segments.