Oceaneering International Prices Senior Notes Worth $500M - Analyst Blog

On Nov 18, oilfield services provider, Oceaneering International, Inc. (OII) announced the pricing of its Senior Notes offering worth $500 million. The Senior Notes, carrying an interest rate of 4.65% and due to mature in 2024, were priced at 99.614% of face value.

Oceaneering International stated that it plans to utilize the net proceeds from the offering for capital expenditures, share repurchases and other general corporate purposes. The company further added that it plans to invest the proceeds in short-term, liquid investments till the amount is used for the above-mentioned purposes.

The company also mentioned that the offering is likely to close on Nov 21.

Houston, TX-based Oceaneering International primarily serves the global offshore oilfield industry by providing engineered products and services. The company also offers inspection work, subsea products and services.

On the earnings front, the company has consistently performed well, beating the Zacks Consensus Estimate in all the trailing four quarters, with an average positive surprise of 2.76%. In the last reported quarter, the company surpassed the Zacks Consensus Estimate by 3 cents owing to robust performance by the Subsea Products and Remotely Operated Vehicles segments.

However, during third-quarter results, Oceaneering International narrowed its 2014 EPS guidance to $3.95–$4.00 from $3.95–$4.05. Also, most brokerage firms have lowered estimates for the company's current quarter as well as full-year estimates, which make us cautious.

Currently, Oceaneering International carries a Zacks #3 (Hold).

Meanwhile, one could consider better-ranked players from the same industry like Emerge Energy Services LP (EMES), Newpark Resources Inc. (NR) and Transocean Partners LLC (RIGP). All these stocks hold a Zacks Rank #2 (Buy).