Shares of Oceaneering International (NYSE:OII) tumbled 23.3% in July, according to data provided by S&P Global Market Intelligence. The stock plunged after the offshore service and products company posted lackluster second-quarter results.
The company's second-quarter revenue rose sequentially and year over year. That was due to the much-improved performance of the remotely operated vehicles segment and the subsea products segment. Both business units delivered double-digit revenue growth thanks to improving conditions in the offshore drilling market.
However, the company's revenue missed analysts' expectations, while its net loss was larger than they anticipated. Two factors hurt the quarter. First, Oceaneering didn't secure a large U.S. Navy contract that it expected to win. Meanwhile, it didn't see the increase in subsea project call-out work that it had anticipated.
As a result of those issues, the company no longer believes it can achieve the high end of its full-year earnings guidance range. That led it to reduce the top end of its forecast by $10 million.
While market conditions for Oceaneering International's core offshore drilling businesses are improving, the company continues to struggle with the overall challenges in the oil market. With crude prices remaining volatile, industry activity isn't expected to bounce back too much in the near term. That tepid outlook will likely keep the pressure on shares in the coming months.