What happened

Shares of energy services company Oceaneering International (OII -1.68%) rose just under 22% in April, according to data provided by S&P Global Market Intelligence. Although the stock had been drifting higher through most of the month, it got a bit of rocket fuel on April 29 when the company reported earnings. That boost pushed it from a gain in the high single digits to the heady 22% at which it ended the month.

So what

Investors were obviously excited about the company's earnings, driven largely by improvements in its energy business. That said, it was the trend, not the absolute numbers, that was thrilling. That's because Oceaneering International lost $0.25 a share in the first quarter. But that was up from a loss of $0.50 per share in the same period of 2018. It was sequentially better than the fourth quarter of 2018 as well, but that period included write-offs, so the $0.65 per share of red ink in the final quarter of last year looks worse than it really was.   

An offshore drilling rig at dusk.

Image source: Getty Images.

That said, Oceaneering International's earnings were stronger than had been expected, with each of its main businesses generating positive EBITDA. Furthermore, management highlighted underlying strength in demand and pricing, which bodes well for the future. For example, it noted that backlog increased to $464 million from $332 million at the end of 2018. With more work flowing onto the books, the future clearly looked brighter at the end of the first quarter than it did at the end of 2018. And, equally as pleasing, management lifted the low end of its guidance for full-year 2019 adjusted EBITDA. So, despite continued losses, the earnings news was generally positive.   

Now what

Oceaneering International provides services to the energy industry, a notoriously volatile business driven by the often swift and dramatic ups and downs in oil prices. Although the quick share-price advance in April was nice to see, conservative investors would probably be better off with a more broadly diversified energy play (think Chevron or ExxonMobil). In the end, Oceaneering International is something of a leveraged bet on the oil industry since it can do very well financially in good times but suffer deeply when times are tough.