Daily Archives: October 27, 2011
Oceaneering International, Inc. today reported third quarter earnings for the period ended September 30, 2011. On revenue of $602 million, Oceaneering generated net income of $78.6 million, or $0.72 per share.
These results include an $18.3 million pre-tax gain, $11.9 million after tax using an incremental tax rate of 35%, on the previously announced sale of the Ocean Legend, a mobile offshore production system. Also, the third quarter results included a lower provision of income taxes due to recognition of $4.9 million of tax benefits principally related to prior years.
Oceaneering reported revenue of $516 million and net income of $59.2 million, or $0.54 per share, for the third quarter of 2010. For the second quarter of 2011, Oceaneering reported revenue of $546 million and net income of $56.7 million, or $0.52 per share.
Quarterly earnings were also higher year over year on the strength of record quarterly operating income from Remotely Operated Vehicles (ROV) and Subsea Products. Sequentially, Oceaneering’s quarterly EPS increase was attributable to improved operating income from four of its five business segments: ROV, Subsea Products, Subsea Projects and Advanced Technologies.
M. Kevin McEvoy, President and Chief Executive Officer, stated, “We are very pleased with our record EPS for the quarter, particularly in light of regulatory-constrained activity in the U.S. Gulf of Mexico (GOM). Our overall operations performed within expectations and we remain on track to achieve record EPS for the year.
“Compared to the second quarter of 2011, ROV operating income increased on the strength of higher international demand to provide drill support and vessel-based services. Our quarterly ROV days on hire increased to an all-time high of over 19,000 days. Subsea Products operating income rose on profit increases from most of our product lines, led by increased sales of valves and Installation and Workover Control System services. Subsea Products backlog at quarter-end was $403 million, comparable to our June 30 backlog of $405 million and up from $308 million one year ago.
“Sequentially, Subsea Projects operating income was higher due to the gain on the sale of the Ocean Legend and a slight seasonal increase in demand for our diving services. Advanced Technologies operating income improved on higher demand from the U.S. Navy to perform engineering services and submarine repair work.
“We are adjusting our 2011 EPS guidance range to $2.11 to $2.15, from $1.90 to $1.98, to reflect our third quarter results and our EPS outlook for the fourth quarter of $0.48 to $0.52, based on an expected quarterly tax rate of 31.5%. We continue to anticipate that our ROV and Subsea Products segments will achieve record operating income in 2011.
“We are initiating 2012 EPS guidance with a range of $2.35 to $2.55, as we expect another record earnings year. For our services and products, we anticipate continued international demand growth and a moderate rebound in overall activity in the GOM. The major determinant of our guidance range spread is the amount of operating income growth we generate from our Subsea Projects business.
“Compared to 2011, we anticipate all of our segments will have higher operating income results in 2012; ROV on greater service demand off West Africa and in the GOM and Subsea Products on the strength of higher tooling sales and increased throughput at our umbilical plants. For Subsea Projects, we foresee a gradual recovery in the GOM during 2012 and a substantial increase in revenue and operating income as a result of an anticipated international expansion of our deepwater vessel project capabilities.
“Looking beyond 2012, our belief that the oil and gas industry will continue to invest in deepwater projects remains unchanged. Deepwater remains one of the best frontiers for adding large hydrocarbon reserves with high production flow rates at relatively low finding and development costs. With our existing assets, we are well positioned to supply a wide range of the services and products required to support safe deepwater efforts of our customers.”
- Norway: Goliat Field Goes Online (mb50.wordpress.com)
- Norway: Statoil 3Q Net Income Rises 39 pct (mb50.wordpress.com)
- Mexico: Cal Dive to Install Subsea Pipeline in Abkatun Offshore Field (mb50.wordpress.com)
- Going deeper: Canyon Offshore’s ROV pilots explain there’s more than meets the eye (gcaptain.com)
- Hess Plans Development Of Tubular Bells GOM Project (gcaptain.com)
- Sarah: deepwater intervention vessel (mb50.wordpress.com)
- Shell Perdido: The first full field subsea separation and pumping system in the Gulf of Mexico. (video) (mb50.wordpress.com)
By John Konrad On October 27, 2011
Could the world’s most desirable mega-yacht be an oil field workboat in disguise?
This week an armada of boats lay siege on Fort Lauderdale for the year’s largest boat show and, like models during fashion week, countless mega-yachts arrive daily with hopes of seducing a billionaire to sleep in her cabin. But, for one exceptional beauty, this is not the goal.
With a sharp chiseled bow softened by elegant curves the Sea Axe is a genuine head turner. Her looks are unique and stunning but, unlike most other yachts of her type, they also serve a function enabling her to cut through chop and blaze down the face of a following sea at high speed. Even more intriguing is her lineage. The latest in a line of workboats designed by Damen Shipyards, her unique shape is based off the Fast Crew Supplier, a workboat developed to service oil rigs in the rough waters of the North Sea. This fact, combined with her natural beauty, is what most intrigues the world’s wealthier individuals.
The Sea Axe FYS (Fast Yacht Support), as she is named, is not designed to be the primary yacht of billionaires. Instead she is designed as an elegant work horse capable of both turning heads and carrying the toys of her wealthy owners. The Sea Axe’s generous deck space provides plenty of room for a launch boat, jet skis, automobiles and a helicopter.
In addition to toys the Sea Axe can also carry fuels, consumables, waste and extra staff. In short, the Sea Axe lets owners make the most of their luxury megayacht experience by acting as a floating storage room for extra people and stuff. And she is fast capable of speeds up to 28 knots with a sailing range of 5,000 nautical miles (at 18-knots).
In the Christopher Guest-directed comedy, Best in Show, one character is continuously approached by men she once slept with. The details of her pre-marital love affairs, combined with her wardrobe of scant lycra pull-ups, leads her neurotic husband to compare her to “a cocktail waitress on an oil rig.”
One day the lucky owner of Sea Axe may be similarly dismissive but, this week in Fort Lauderdale, this working class girl of Aberdeen is truly the best in show.
- Welcome to the world ‘s biggest in water boat show the 52nd Fort Lauderdale International Boat Show (worldsportsboats.com)
- Crane hauls up sunken workboat off W. Seattle (seattletimes.nwsource.com)
- Crane Hauls up Sunken 73-Foot Washington Workboat (abcnews.go.com)
- Crane hauls up sunken 73-foot Washington workboat (seattletimes.nwsource.com)
- The Super Yacht That’s Dubbed “Tropical Island Paradise” (p21chong.wordpress.com)
- FULL SPEED AHEAD: As Bombardier cuts 1,400 rail jobs, a yacht yard takes on 1,000…how building boats has become a £3bn industry (thisismoney.co.uk)
- Billion Dollar Themed Mega-yachts (celebritynetworth.com)
- Looking To Buy A Yacht? Make Sure You Follow These 10 Simple Steps (businessinsider.com)
- Wally Ace Yacht (heelsandhiphop.com)
- 3 cheers for the ‘1-percenters’ – by Congressman Allen West – Opinion Contributor (allenwestrepublic.wordpress.com)
- Maltese Falcon: A mega yacht with a pricetag even billionaires shy away from (29 Photos) (thechive.com)
- Bored with your yacht? Try a yacht island instead (sfgate.com)
- Paul Allen selling his private island, tired of double parking his mega-yachts (celebritynetworth.com)
- Your Very Own Floating Bond-Villain Lair for $680 Million (businessweek.com)
To win the jobs war, America needs to be the best in the world not only at entrepreneurship and innovation, but also at customer science.
The country simply cannot win new jobs unless it uses the most advanced sciences in the world to create billions of new global customers.
Simply put, new global customers create new U.S. jobs. That’s why America needs to more than triple exports in the next five years — or continue on a downward slide. The battle for global customers will be the defining element in the new war for jobs and GDP growth.
Whoever sells the goods and services, and whoever owns the companies that own the customers, wins. The United States needs to average a minimum 10% annual increase in exports over the next 30 years to maintain its leadership of the free world.
The big advantage China has over the United States right now is that China wins customers with low prices. This strategy really can work — not great, but OK for a while — because as long as America invents the new products and innovations, it can produce them for the first iteration and create millions of great jobs. But when China evolves to understanding customers and their needs better than U.S. companies do, the United States loses its advantage.
If America allows China — or India or anyone else — to get further into behavioral economics and customer science than it does, the country will lose the jobs war. That is what Toyota, Volkswagen, and other automakers did to U.S. car companies.
They won by simply listening to customers better and then delivering what customers wanted at fair prices. America cannot afford to concede the science of customer insights or customer-centric innovations to China or any other foreign competitors or it risks losing to them. This is a “game over” moment for America.
Why? Because if those countries learn to provide better service and meet customers’ needs better, then customers won’t need U.S. retailers and supply chains to deliver products. China will set up its own retailers and supply chains, and God help America if that were to happen. Its best retailers, shops, banks, car dealers, restaurants, grocery stores, malls, and even movie theaters would be Chinese owned and controlled, which means that the best cash flows, margins, and stock values all become foreign owned.
There has already been a trend lately toward foreign-business takeovers, and the effects have been economically and psychologically devastating in headquarter cities. Belgian-based conglomerate InBev bought American icon Anheuser-Busch. When that happened, a little bit of St. Louis died. Brazilian-backed 3G Capital acquired Burger King, and a little bit of Miami died.
When a national oil company in Venezuela bought out CITGO, a little bit of Houston died. When the Arcapita Bank, formerly First Islamic Investment Bank, bought a majority of Caribou Coffee, a little bit of Minneapolis died. No question, when foreign companies take over American businesses, something changes. Americans feel somehow that they’re not what they used to be.
This might sound controversial to some Americans, but they should all love Walmart, no matter what particular beef they might have with the company. If it weren’t for Walmart eating up all the little corner grocers and hardware stores, the Germans, Japanese, French, and for sure the Chinese would have.
Somebody will come do it better. Walmart, Target, and Costco should be applauded for leading the way in reinventing retailing in America because if they hadn’t, foreign companies would have. Right now the big box stores are worried about the “dollar stores.” That’s great — Americans want Americans competing against other Americans.
The flip side of great performers like Walmart, Target, and Costco is poorly run companies. They’re job killers, especially in their headquarter cities. Local firms, big or small, that are bad with customers will be cannibalized by outside companies. The most dangerous outside companies, as far as your city is concerned, are foreign. Jobs appear in combination with customers and GDP growth and then again in combination with American ownership and control.
You might think I’m an advocate of protectionism. I am not. Quite the opposite, I am 100% pro trade, pro competition, and pro law of the jungle. By no means do I think America should erect barriers against foreign-owned companies.
Leaders have yet to learn that relationships trump price in almost all businesses, from hair salons to high-tech consulting.
The solution isn’t to avoid competition, but to take it head-on. Americans have to know more about American customers and all customers in the world than Europeans do, and especially more than the Chinese, Brazilians, and Indians do. The country that best knows the needs and preferences of all 7 billion customers will have a prohibitive advantage in winning the world’s best jobs.
Sure, companies should do a great job of executing Six Sigma, lean manufacturing, reengineering, TQM, and so on. These practices all work and are essential to winning, but they are no longer enough. I don’t know about your organization, but Gallup has squeezed the last drop out of most of these brilliant practices, all to its great benefit. But the low-hanging fruit of improving processes and efficiency has all been picked. What remains untapped is the incalculable opportunity within the emotional economy of customers.
In fact, one of the biggest blind spots in most American businesses is that they don’t realize how big the emotional economy is within their own customer base worldwide. The best corporate leaders in the United States are still unaware that they are leaving a great deal of money on the table through abysmal execution of the employee-customer links because they are so focused on the “hard numbers,” of which they have already squeezed every dollar to diminishing returns.
You and your teams can double and quadruple exports and foreign sales by increasing the number of your current customers who give you a 5 for partnership on a 1-5 scale. Let’s assume that 20% of your customers give you a top score, which is about the global average. By raising that number to 40%, you will experience record sales increases without spending a nickel more on advertising and marketing. You grow, America grows, jobs grow.
From my 40 years of studying customers, this represents the biggest missed opportunity of all organizational leadership — probably because it is easier for leaders to talk a good game and then at the end of the day, just cut their price, falling back to the rule of classical economics that every decision is rational, which is not true.
What customers at any level really want is somebody who deeply understands their needs and becomes a trusted partner or advisor. The business world fails at managing this one most critical behavioral economic variable more than any other, but it remains the lowest hanging fruit for organic growth for virtually all businesses.
Leaders have yet to learn that relationships trump price in almost all business circumstances, from hair salons to high-tech consulting. He who most deeply understands the customer’s needs tends to win and always gets the highest margins. That’s why talent and relationships can almost always beat low price — they inspire customer engagement. To measure customer engagement, these are the best 11 questions Gallup scientists have found to ask customers anywhere in the world:
CE1. Taking into account all the products and services you receive from them, how satisfied are you with (Company) overall?
CE2. How likely are you to continue to do business with (Company)?
CE3. How likely are you to recommend (Company) to a friend or associate?
CE4. (Company) is a name I can always trust.
CE5. (Company) always delivers on what they promise.
CE6. (Company) always treats me fairly.
CE7. If a problem arises, I can always count on (Company) to reach a fair and satisfactory resolution.
CE8. I feel proud to be (a/an) (Company) customer.
CE9. (Company) always treats me with respect.
CE10. (Company) is the perfect company/product for people like me.
CE11. I can’t imagine a world without (Company).