HOUSTON - Oceaneering International, Inc. (NYSE:OII) has secured two significant contracts from Petroleo Brasileiro S.A. (Petrobras) to supply a range of products for offshore projects in Brazil. The contracts, won through a competitive bidding process, are expected to generate revenue between $120 million and $183 million for Oceaneering's Manufactured Products segment.
Under the terms of the contracts, Oceaneering will provide up to 362 kilometers of steel tube and thermoplastic electro-hydraulic umbilicals, along with associated subsea distribution hardware. The manufacturing process is slated to occur at Oceaneering's facility in Niteroi, Brazil, with the final product delivery anticipated in the fourth quarter of 2027.
Roderick A. Larson, President and Chief Executive Officer of Oceaneering, commented on the contracts, highlighting the company's role as a trusted provider capable of delivering high-quality work safely and on time. Larson expressed confidence in the deepwater market's resurgence and the continued commitment of customers like Petrobras.
The company's forward-looking statements in the press release, including anticipated revenue and project details, are subject to risks and uncertainties that could cause actual results to differ materially. These include counterparty performance, market conditions, and other economic factors.
Oceaneering International, Inc. is a global provider of engineered services and products, offering innovative solutions to the offshore energy, defense, aerospace, manufacturing, and entertainment sectors.
This news article is based on a press release statement from Oceaneering International, Inc.
In other recent news, Oceaneering International has seen a revision in its stock outlook by Barclays (LON:BARC). The firm downgraded the stock from an Equalweight to an Underweight rating and adjusted its price target from $22 to $21. This reflects concerns over Oceaneering International's growth prospects and free cash flow generation.
The company's guidance for mid-single-digit growth this year, attributed to the defensive nature of its portfolio, is expected to limit its ability to benefit from anticipated increases in offshore upstream spending in the coming years. Oceaneering's Energy segments, accounting for roughly 80% of its revenue, display generally low growth profiles, with the exception of the remotely operated vehicles (ROVs) business that contributes around 25% of revenue and has seen pricing rise to multi-year highs.
Despite this, Barclays expressed concern over the lack of clear earnings visibility and absence of medium-term targets from Oceaneering International's management, factors that could potentially limit the company's future free cash flow generation. These recent developments underscore the evolving financial landscape for Oceaneering International as perceived by industry analysts.
InvestingPro Insights
As Oceaneering International, Inc. (NYSE:OII) secures substantial contracts with Petrobras, the company's financial metrics and market performance come into focus. According to real-time data from InvestingPro, Oceaneering has a market capitalization of $2.11 billion, indicating its significant presence in the industry.
The company's P/E ratio stands at 19.34, with a slight adjustment to 19.5 when looking at the last twelve months as of Q1 2024, which may appeal to investors seeking reasonable valuations relative to earnings. Oceaneering's revenue has shown robust growth, with a 15.29% increase over the last twelve months as of Q1 2024, signaling potential for continued financial health.
An InvestingPro Tip highlights that Oceaneering is trading at a low P/E ratio relative to near-term earnings growth, which could present an attractive opportunity for investors banking on the company's contract wins translating into financial performance.
Moreover, analysts have revised their earnings upwards for the upcoming period, reflecting optimism about the company's future profitability, a sentiment further supported by the prediction that Oceaneering will be profitable this year. It's noteworthy that while the company does not pay dividends, it maintains a solid liquidity position with liquid assets surpassing short-term obligations.
For those interested in a deeper dive into Oceaneering's financials and market predictions, InvestingPro offers additional insights and tips. There are a total of 9 InvestingPro Tips available for OII, which can be accessed at: https://www.investing.com/pro/OII. For readers who find these insights valuable, InvestingPro invites you to utilize the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, helping you stay ahead with comprehensive analysis and data.
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