Oceaneering (NYSE: OII) reported Q1 EPS of ($0.24), $0.21 better than the analyst estimate of ($0.45). Revenue for the quarter came in at $493.89 million versus the consensus estimate of $465.25 million.

Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "We are very pleased that our first quarter results exceeded expectations. Higher than expected activity and good execution within our energy-focused businesses were key factors in achieving this performance. Each of our operating segments generated positive EBITDA, and our consolidated adjusted EBITDA of $30.4 million surpassed published consensus estimates.

"Based on our first quarter results and our expectations for the remainder of 2019, we are narrowing our adjusted EBITDA guidance by raising the low end of the previous range, and now expect to generate between $150 million and $180 million of adjusted EBITDA in 2019. We continue to project positive free cash flow for the year.

"Sequentially, our first quarter ROV revenues and operating results increased. ROV EBITDA margin increased to 29% and utilization increased to 53%. Average ROV revenues per day on hire increased 5% due largely to reimbursement of costs associated with mobilizations and installations. At the end of March, our ROV fleet count remained at 275 vehicles. Our fleet use during the quarter was 69% in drill support and 31% in vessel-based activity. At the end of March, we had ROV contracts on 97 of the 159 floating rigs under contract, resulting in a drill support market share of 61%.

"Compared to the fourth quarter, Subsea Products first quarter operating results improved on flat quarterly revenues. This improvement was largely due to higher levels of service and rental activity at improved margins achieved by good execution. Our Subsea Products backlog at March 31, 2019 was $464 million, compared to our December 31, 2018 backlog of $332 million. The backlog increase was largely attributable to umbilical and related hardware order intake. Our book-to-bill ratio for the trailing twelve months was 1.4.

"Sequentially, Subsea Projects operating results improved on flat revenue due to favorable project mix and good execution. Asset Integrity operating income was near breakeven on slightly lower revenue.

"For our non-energy segment, Advanced Technologies, first quarter 2019 operating results declined sequentially, due primarily to a lower number of job completions and contract close-outs in our commercial businesses. In addition, as anticipated, Unallocated Expenses were higher in the first quarter of 2019 compared to the fourth quarter of 2018.

"During the quarter, we generated $19.1 million of cash flow provided by operating activities, and utilized $30.0 million of cash for maintenance and growth capital expenditures, resulting in a use of $10.8 million in cash during the quarter.

"For the second quarter, compared to the first quarter, we anticipate quarterly operating profitability and improvement in our ROV, Subsea Projects, and Advanced Technologies segments and relatively flat quarter-to-quarter results in our Subsea Products and Asset Integrity segments. Unallocated Expenses are forecast to be in the mid-$30 million range, consistent with the first quarter. On a consolidated basis, we expect the sequential quarterly results to improve substantially, with EBITDA being in line with current published consensus estimates.

"For the full year of 2019, at the segment level, we forecast overall ROV fleet utilization in the upper 50% range and ROV EBITDA margin to remain relatively flat. For Subsea Products, we continue to expect: good order intake during the first half of 2019 driving increased activity in the second half of 2019; a book-to-bill ratio in the range of 1.25 to 1.4 for the full year; and operating margins in the mid-single digit range. We expect good activity levels in our Subsea Projects segment for the remainder of 2019. For Asset Integrity, we expect a slight increase in activity during the second half of 2019 and operating margins in the low-single digit range.

"Our outlook for the energy segments, along with projected improvement in Advanced Technologies' operating results, give us confidence to narrow our 2019 EBITDA guidance. Our 2019 income tax payments are anticipated to be approximately $25 million, net."

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