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A Look at Oceaneering International’s Returns

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Oceaneering International’s year-over-year return

Oceaneering International’s (OII) YoY (year-over-year) return was 9.2% on June 21. In comparison, as of June 22, the Energy Select Sector SPDR ETF (XLE) had risen 15% YoY. XLE tracks an index of US energy companies in the S&P 500 Index.

The VanEck Vectors Oil Services ETF (OIH) has witnessed a 4.8% YoY return. OIH tracks an index of 25 oilfield equipment and services companies. As we can see, OII has outperformed OIH but underperformed XLE in the past year.

OII has also underperformed the SPDR S&P 500 ETF (SPY) since June 22, 2017. SPY, which represents the broader market, has produced a 13% YoY return since that time.

The SPDR S&P Oil & Gas Equipment & Services ETF (XES) has risen 9.8% YoY as of June 21. XES provides exposure to the oil and gas equipment and services segment of the energy industry.

Crude oil and rigs

On June 21, WTI crude oil’s price was ~53% higher than it was a year ago. Led by crude oil’s strength, the rig count has increased ~13% in the United States in the past year as of the week ending on June 21.

Some recent factors that affected OII’s returns

On April 25, Oceaneering International released its first-quarter results. OII’s revenue fell 7% YoY in the quarter.

OII reported net income of -$49.1 million in the quarter, a deterioration compared to -$7.5 million in the first quarter of 2017. The fall came primarily from lower utilization and lower average revenue per day on hire in 2018, which resulted from a shift in geographic mix and market conditions in OII’s Remotely Operated Vehicles segment. Lower demand for manufactured products also negatively affected OII’s Subsea Products segment’s operating income.

On March 5, OII acquired Ecosse Subsea Systems. Ecosse provides engineering and other services to the renewable energy and oil and gas industries.

In the next article, we’ll discuss Oceaneering International’s stock price forecast.

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