UPDATE 1-Oceaneering Q4 profit up; Q1 outlook misses Street view

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Feb 20 (Reuters) - Oilfield services company Oceaneering International Inc (OII.N) reported a higher quarterly profit, helped by demand growth in its offshore oilfield service and product markets, but forecast first-quarter earnings below Street expectations.

Shares of the company fell more than 8 percent in after hours trade.

Oceaneering said it expects to earn 65 cents to 75 cents a share in the first quarter. Analysts on average were expecting earnings of 76 cents a share, excluding items, according to Reuters Estimates.

The company, based in Houston, Texas, said subsea projects operating income is expected to decline in 2008 due to decreasing demand for its shallow-water vessel and diving services as hurricane damage projects near completion.

Additionally, four of its six company-owned vessels will be temporarily out of service during the year, undergoing mandatory regulatory drydock inspections, the company said.

For 2008 the company backed its earnings outlook of $3.50 a share to $3.80 a share. Analysts on average expect $3.70 a share, excluding items.

The company reported a fourth-quarter net income of $45.5 million, or 81 cents a share, compared with $29.8 million, or 54 cents a share a year ago.

Revenue rose more than 40 percent to $481.6 million.

Analysts on average were expecting earnings of 82 cents a share, excluding special items, on revenue of $448.1 million.

Shares of the company fell more than $4 after the bell. They closed at $65.56 on the New York Stock Exchange Wednesday. (Reporting by Nachiket Kelkar in Bangalore; Editing by Anupama Dwivedi)