Smith International's third quarter earnings double from last year

Smith International Inc., Houston, declared net income of $42.1 million for the third quarter, more than double the $20.5 million in the third quarter 2000. Revenues for the third quarter were $909.7 million, up 27% from the same quarter a year ago.

Oct. 18, 2001

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By the OGJ Online Staff

HOUSTON, Oct. 18 -- Smith International Inc., Houston, declared net income of $42.1 million for the third quarter, more than double the $20.5 million in the third quarter of 2000.

Revenues for the third quarter were $909.7 million, up 27% from the same quarter a year ago.

"The majority of the revenue improvement related to increased natural gas-directed drilling activity in the US, which grew over 30% between the comparable periods," said the company. It added the improvement was also attributable to incremental revenues from acquisitions as well as increased customer spending outside the US.

Oil field segment revenues were up 23% over the prior quarter; drilling activity was up 15%.

Chairman and CEO Doug Rock said, "Smith reported record revenues and earnings in the third quarter. ... Although US gas drilling activity has fallen 12% since the end of the second quarter, we continue to believe the medium to longer-term fundamentals for the North American natural gas market remain very strong. The US gas drilling decline has had little impact on our US revenues to date; however, further significant drilling reductions, if they were to occur, could effect Smith's future results."

Smith's M-I business unit brought in $412.4 million for the quarter, up 26% from the same period a year ago -- 19% after excluding effect of acquired operations. Most of the revenue growth related to increased sales of base-fluid products because of a 27% improvement in US land-directed drilling, said Smith. Increased demand for fluid processing and waste management also contributed.

Revenues for the Smith Bits unit were $105.1 million, 25% above the third quarter 2000. Increased drilling worldwide increased bit sales volumes, said Smith.

Smith Services reported revenues of $104.7 million, a 39% increase over the third quarter 2000. Improved North American spending levels accounted for most of the increase, noted Smith. On a product basis, more than 60% of the improvement was attributable to higher drilling products and services revenues, including increased demand for tubular products and inspection services.