Oceaneering International, Inc. (NYSE:OII) today reported record first quarter earnings for the period ended March 31, 2009. On revenue of $435 million, Oceaneering generated net income of $44.3 million, or $0.80 per share. During the corresponding period in 2008, Oceaneering reported revenue of $436 million and net income of $41.3 million, or $0.73 per share as restated. Year-over-year, quarterly earnings increased due to growth in Remotely Operated Vehicles (ROV) and Subsea Projects operating profits.
Sequentially, quarterly earnings declined largely due to a seasonal reduction in demand for our ROV and Subsea Projects services, and a lower operating income performance by Subsea Products. The Subsea Projects decrease was also attributable to an exceptionally good performance in the fourth quarter of 2008. The Subsea Products reduction in operating income was mainly the result of a decline in demand for ROV tooling and lower umbilical plant throughput.
T. Jay Collins, President and Chief Executive Officer, stated, "It is a great accomplishment to have record first quarter results to report at a time when many companies in the oilfield services industry are experiencing a sharp downturn in demand. This is a tribute to our business focus on deepwater and subsea completion activity and our expertise in underwater platform and pipeline repair.
"First quarter results were above our guidance range as our ROV and Subsea Projects businesses achieved operating income that surpassed our expectations. ROV performance was attributable to exceptional execution, which resulted in lower than anticipated operating expenses. During the quarter we put six new vehicles into service to meet market demand and, at the end of March 2009, had 233 ROVs in our fleet, compared to 212 a year ago. Subsea Projects exceeded our projection as a result of performing more deepwater installation work and shallow water diving projects on hurricane damaged facilities.
"In light of our better than expected first quarter earnings performance, we are raising the bottom of our 2009 EPS guidance range by $0.10, resulting in a range of $3.10 to $3.60. Much uncertainty remains in predicting the rate of subsea field development order flow. Given our first quarter performance and outlook for the rest of the year, we are now anticipating that our EPS in 2009 will not follow our historical quarterly pattern.
"Our outlook for the year remains basically the same as we discussed during our last earnings release conference call. Relative to 2008, we anticipate achieving profit growth from our ROV business and declines in operating income from the rest of our oilfield business operations. While we are achieving efficiency gains in our Subsea Products manufacturing processes, these will likely not offset anticipated 2009 demand declines for our product lines. For the second quarter of 2009, we are forecasting EPS of $0.75 to $0.85.
"In 2009, we anticipate generating $285 million to $320 million of cash flow, simply defined as net income plus depreciation and amortization expense. This projected cash flow and our existing revolving debt availability should give us ample liquidity to fund our estimated $175 million of capital expenditures and repay the $105 million of debt scheduled to mature this year. During the quarter we generated $72 million of cash flow and our capital expenditures were $45 million, of which $37 million was in support of growing our ROV fleet. Additionally, we prepaid $25 million of our 2009 debt maturities.
"Our earnings before interest, taxes, and depreciation and amortization expense (EBITDA) were $98 million for the quarter. For the year 2009, we expect to generate EBITDA in the range of $385 million to $440 million. "As of March 31, 2009, we had $200 million of debt and $200 million available under our credit facilities. With $1.0 billion of equity on our balance sheet, our debt-to-capitalization percentage was 16%.
"Looking longer term, our belief remains unchanged that the oil and gas industry will continue to invest in deepwater to counteract high existing reservoir depletion rates. Deepwater is one of the best frontiers for adding large hydrocarbon reserves with high production flow rates at relatively low per barrel finding and development costs. Therefore, we anticipate demand for our deepwater services and products will remain promising for the next several years."