Yahoo Finance Oceaneering International Inc (OII) Q1 2024 Earnings Call Transcript Highlights: Robust Growth ...
Net Income: $15.1 million
Earnings Per Share (EPS): $0.15
Adjusted Net Income: $13.9 million
Adjusted EPS: $0.14
Revenue: $599 million
Operating Income Growth: Up 37% year-over-year
Revenue Growth: Up 12% year-over-year
Adjusted EBITDA: $61.7 million
ROV Revenue per Day: $10,009
ROV Utilization: 64%
ROV Days on Hire: 14,536 days
Manufactured Products Revenue Growth: Up 15% year-over-year
Manufactured Products Operating Income: $13.2 million
Manufactured Products Backlog: $597 million
Free Cash Flow: Negative $95.2 million
Cash Balance: $355 million
Capital Expenditures: $25.5 million
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you provide an update on the mobile robotics order book through the first quarter and the benefits expected from outsourcing manufacturing? A: Rod Larson, President & CEO, explained that while there are no major new orders to announce, there is a steady interest in the technology, with initial trial orders expected to lead to larger orders. Outsourcing manufacturing is anticipated to reduce costs through efficient sourcing and production, allowing Oceaneering to focus its facilities on R&D and prototype development.
Q: What is the total addressable market for the specific robotics business, and has it changed recently? A: Rod Larson mentioned that the market is expected to grow from 5% to 8% in the coming years, with the addressable market, or the portion likely to switch to autonomous forklifts, also increasing. Alan Curtis, SVP & CFO, added that market research suggests a 15% to 25% CAGR in this space.
Q: How is pricing in the manufactured products segment evolving, and what are the expectations for margin improvement? A: Rod Larson noted improvements in backlog quality and pricing, particularly in smaller, high-margin business areas. Alan Curtis elaborated that while current projects are progressing with higher margins, new projects might initially show lower margins due to the accounting treatment of long-lead materials, but overall margins are expected to improve.
Q: Can you discuss the U.S. Navy and defense innovation unit demo in Norway for the Subsea Robotics? What are the revenue opportunities? A: Rod Larson indicated that Oceaneering is in Phase 2 of the project, focusing on expanding capabilities. While the scale of potential orders isn't specified, the opportunity could be significant depending on the capabilities delivered.
Q: What details can you provide about the newly established shareholder return program and share repurchase strategy? A: Rod Larson stated that the program's implementation will depend on cash generation and market conditions. The company aims to balance share repurchases with organic investment opportunities, ensuring capital is deployed effectively.
Q: What is the outlook for ROV pricing, especially in relation to deepwater rig rates? A: Rod Larson expects ROV pricing to continue improving and align with rising rig rates. Although not all rates have adjusted yet, the trend is positive, and Oceaneering anticipates ROV rates to potentially exceed past highs as the market recovers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
