On May 29, Zacks Investment Research upgraded oilfield
Oceaneering International Inc.
) to a Zacks Rank #2 (Buy).
EXTERRAN HLDGS (EXH): Free Stock Analysis
NEWPARK RESOUR (NR): Free Stock Analysis
OCEANEERING INT (OII): Free Stock Analysis
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Why the Upgrade?
The operating environment and growth prospects seem bright for
Oceaneering, as reflected by strong first-quarter 2013 results
and an enhanced guidance for 2013. Moreover, Oceaneering
delivered positive earnings surprises in two of the last four
quarters (and met estimates in the other two quarters) with an
average beat of 9.87%. The long-term expected earnings growth
rate for this stock is an impressive
Oceaneering reported first-quarter results on Apr 23, 2013.
Earnings per share came in at 69 cents, surpassing the Zacks
Consensus Estimate of 59 cents by 16.95%. The company's earnings
per share figure also increased 46.80% as compared to the
year-ago period. The beat was owing to robust performances from
the Remotely Operated Vehicles and Subsea Products business
Based on its progress, Oceaneering raised its earnings per share
projection for 2013 to $3.10- $3.30 from $3.00-$3.25. The company
also predicts good performances in the operating activities from
all its business units in the second quarter of 2013.
Additionally, Oceaneering's announcement of a 22.22% increase in
its quarterly dividend in late Apr 2013 is another piece of
positive news. We believe that the dividend hike not only
highlights the company's commitment to create value for
shareholders but also underlines its healthy financial condition
and confidence in its business.
Finally, Oceaneering recently inked a deal with Italian oil and
gas contractor, Saipem for the supply of umbilicals for the
development of the Burullus West Delta Deep Marine Phase IXa
project, which is based offshore Egypt. We believe that the
company will be able to earn significant cash flow for its
shareholders in the near future, owing to this contract.
Importantly, for 2013, more than half of the estimates (8 out of
13) were revised higher over the last 60 days, lifting the Zacks
Consensus Estimate to $3.28 per share from $3.25.
Other Stocks to Consider
In the oil field services sector, firms that are expected to
significantly outperform the broader U.S equity market over the
next one to three months are
Newpark Resources Inc.
Exterran Holdings Inc.
). All the firms sport a Zacks Rank #1 (Strong Buy).