Shares of Oceaneering International ( OII 3.21% ) tumbled more than 10% by 10:15 a.m. EDT on Thursday. Driving down the stock of the company, which focuses on offshore-drilling products and services, were lackluster second-quarter results and a dampened outlook for 2019.
Oceaneering International continued to battle challenging conditions in the offshore services market during the second quarter. While the company hauled in $495.8 million of revenue, which was up 4% year over year and less than 1% sequentially, that was $29.2 million below analysts' expectations. Meanwhile, the adjusted net loss of $0.32 per share was $0.08 worse than the consensus estimate.
On the one hand, the company's overall sequential improvement in its operating results met its expectations. CEO Rod Larson noted that "our energy segments, as a whole, performed well." But its non-energy business unit "fell short of our expectations" after the company failed to secure a large anticipated contract with the U.S. Navy.
In addition to that issue, the company noted that an expected increase in call-out work in its subsea projects segment didn't materialize. Because of that, it no longer believes it can achieve the high end of its guidance range. That led the company to water down its full-year EBITDA forecast by reducing the top end of its guidance range by $10 million, which narrowed its outlook to between $150 million and $170 million.
While the offshore drilling market has finally started to rebound, that doesn't mean it's smooth sailing for Oceaneering. The company continues to face headwinds from volatile oil prices, which are causing oil companies to be cautious about spending. If those market conditions worsen, Oceaneering could struggle to meet its expectations in the second half.