What's in Store for Oceaneering International Stock in Q1 Earnings?

Oceaneering International, Inc. OII is set to report first-quarter earnings on April 23, after the closing bell. The Zacks Consensus Estimate for earnings is pegged at 36 cents per share and the same for revenues is pinned at $663.56 million.

Let us delve into the factors that might have influenced OII’s performance in the to-be-reported quarter. Before that, it is worth taking a look at the company’s performance in the last reported quarter.

Highlights of Q4 Earnings

In the last reported quarter, Houston, TX-based oil and gas equipment and services company’s earnings missed the consensus mark. OII reported an adjusted profit of 37 cents per share, which was 8 cents below the Zacks Consensus Estimate. This was due to lower-than-expected operating income from the company’s Manufactured Products, Aerospace and Defense Technologies and Integrity Management & Digital Solutions segments. However, revenues of $713 million beat the Zacks Consensus Estimate by 4.5%.

OII’s earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average negative surprise of 28.40%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

This is depicted in the graph below:      

Oceaneering International, Inc. Price and EPS Surprise

Oceaneering International, Inc. price-eps-surprise | Oceaneering International, Inc. Quote

 

Trend in Estimate Revision for OII Stock

The Zacks Consensus Estimate for first-quarter 2025 earnings has not witnessed any movement in the past seven days. The estimated figure indicates a 157.14% year-over-year increase. The Zacks Consensus Estimate for revenues implies an increase of 10.76% from the year-ago period’s actual.

Factors to Consider Ahead of OII’s Q1 Results   

We expect that OII's revenues are likely to have improved in the quarter to be reported. Oceaneering's revenues are primarily driven by demand for its services and products from the offshore energy industry, particularly in areas with deepwater exploration and production activities. Additionally, the company serves other industries, such as defense and aerospace, diversifying its revenue streams.

The Zacks Consensus Estimate predicts first-quarter revenues to increase from the year-ago quarter’s $599.1 million. This anticipated growth can be attributed to the robust performance of the energy services and products segments, including the Subsea Robotics and Offshore Projects Group products segments.  Based on our model estimates, we expect the Subsea Robotics segment to grow 14.6% and the Offshore Projects Group segment to grow 32% compared with the year-ago quarter’s level.

Oceaneering's strength comes from its strong relationships with well-established, financially stable exploration and production companies. These clients usually have long-term growth plans, which help provide consistent revenues and stability for the business. Since these companies are less affected by short-term changes in commodity prices, Oceaneering is likely to have benefited from more stable earnings.

Demand for Oceaneering's services is expected to have remained strong, thanks to ongoing offshore energy exploration and production. Factors like rising global energy consumption and the shift to cleaner energy have played a big role in this. Additionally, the company’s focus on long-term contracts is likely to have helped shield it from short-term market ups and downs, providing a more stable revenue stream and reducing exposure to price fluctuations.

On a somewhat bearish note, the increase in OII’s costs might have dented its to-be-reported bottom line.  The company’s cost of services and products is projected to reach $546.8 million in the first quarter, which is 7.3% up from the year-ago quarter’s $506.7 million. Moreover, its selling, general and administrative expenses are expected to increase from $55.7 million to $59.7 million in the same time frame.

What Does Our Model Predict for OII?

Our proven model predicts an earnings beat for Oceaneering International this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.

OII’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is +4.23%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

OII’s Zacks Rank:  OII currently carries a Zacks Rank #3.

Other Stocks to Consider

Here are some other firms from the energy space that you may want to consider, as these, too, have the right combination of elements to post an earnings beat this season.

Antero Resources Corporation AR has an Earnings ESP of +6.19% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Antero Resources is scheduled to release earnings on April 30. Notably, the Zacks Consensus Estimate for Antero Resources’ 2025 earnings per share indicates 1604.76% year-over-year growth. Valued at around $10.30 billion, Antero Resources’ shares have gained 17.6% in a year.

Comstock Resources, Inc. CRK has an Earnings ESP of +6.19% and a Zacks Rank #2 at present. Comstock Resources is scheduled to release earnings on April 30.

The Zacks Consensus Estimate for Comstock Resources’ 2025 earnings per share indicates 600% year-over-year growth. Valued at around $5.65 billion, Comstock Resources’ shares have gained 116.2% in a year.

Clearway Energy, Inc. CWEN has an Earnings ESP of +108.50% and a Zacks Rank #3 at present. Clearway Energy is scheduled to release earnings on April 30.

The Zacks Consensus Estimate for Clearway Energy’s 2025 earnings per share indicates 600% year-over-year growth. Valued at around $5.88 billion, Clearway Energy’s shares have gained 32.8% in a year.

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This article originally published on Zacks Investment Research (zacks.com).

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