Apparently someone forgot to tell Oceaneering International (NYSE:OII) that any company associated with offshore drilling should be panicking about the down market, because Oceaneering just posted record earnings for this past quarter. Let's take a quick look at how Oceaneering was able to beat expectations and what management thinks is coming down the pipe for 2015. 

It's good to be the king
If you were to look at either the price of oil or the waning demand for all of the offshore rigs coming online this year, you might think that Oceaneering was going to struggle a little. Unfortunately, that would be wrong, because this past quarter was another record breaking quarter for the company on a revenue, EBITDA, and earnings per share basis.

Much of the company's success this quarter was on the back of its two workhorse business segments: Remotely Operated Vehicles and Subsea Products. The two combined to increase revenue by 20% and both saw a decent increase in margins: 31% operating margin for ROVs, 25% for Subsea products. Also, even though the company brought on 14 new ROVs to brings its fleet size up to 332, it was still able to maintain a ROV utilization rate of 84%. 

One of the big reasons that the company is able to increase its overall business in the face of what is supposed to be a down market is the simple fact that the company has a dominant market share in this small subset of the oil services industry. Oceaneering's fleet of ROV represents over 60% of the global Remotely Operated Vehicle drilling support fleet. 

Guidance
Looking into the future, there doesn't appear to be any reason to believe that Oceaneering can't maintain this pace for the rest of the year and well into 2015. Management estimates that 2015 earnings per share should be in the $4.10-$4.50 range, which is a pretty decent improvement on this year's anticipated EPS of $3.95-$4.00. The reason that management has so much confidence in today's market is that much of the services performed by its ROVs can be related to life-of-field activities such as maintenance and surveys of existing wells rather than lots of new exploration and development projects. 

Here's another thing to consider as well: Many of the big spenders in the industry such as the integrated oil and gas companies as well as the national oil companies have committed to their 2014 budgets, so there isn't much that is going to sway Oceaneering's results for this quarter and possibly into the next one as well. Perhaps if companies come in with considerably smaller 2015 spending plans, then we might start to see that weakness in the market actually catch up to the company a little bit. 

What a Fool believes
This was yet another very solid quarter for Oceaneering. It's still able to increase margins and maintain a strong utilization rate for its fleet even with that fleet still expanding, and management still sees room to increase shareholder value through more repurchases of shares -- management bought back $200 million in shares this past quarter. As a company that contracts out to the oil and gas business, it wouldn't be too surprising for long-term investors if the stock waxes and wanes a little from the spending habits of the industry, but as long as it can maintain its dominant market share in ROV drilling services it should continue to have success for many years to come. 

Tyler Crowe has no position in any stocks mentioned. 

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