Smith International Inc. (SII, Financial) filed Quarterly Report for the period ended 2009-06-30.
Smith International Inc. is a worldwide supplier of premium products and services to the oil and gas exploration and production industry the petrochemical industry and other industrial markets. The company provides a comprehensive line of technologically-advanced products and engineering services including drilling and completion fluid systems solids-control equipment waste-management services three-cone and diamond drill bits fishing services drilling tools underreamers casing exit and multilateral systems packers and liner hangers. Smith International Inc. has a market cap of $5.71 billion; its shares were traded at around $26.03 with a P/E ratio of 9.7 and P/S ratio of 0.5. The dividend yield of Smith International Inc. stocks is 1.9%. Smith International Inc. had an annual average earning growth of 22.5% over the past 10 years. GuruFocus rated Smith International Inc. the business predictability rank of 2.5-star.
Operating income for the M-I SWACO segment was $121.3 million for the three months ended June 30, 2009 reflecting operating margins of 12.0 percent. After excluding severance charges of $3.0 million recorded in the June 2009 period, operating income was 12.3 percent of revenues. The margin decline reflects the impact of lower business volumes and, to a lesser extent, the loss of a higher proportion of environmental waste management and other service-based offerings which generate better overall margins. On an absolute dollar basis, operating income declined $91.0 million below the prior years level. After considering charges related to cost reduction initiatives, operating income fell $88.0 million period-to-period as the impact of lower revenue volumes on gross profit levels were partially offset by reduced variable-based operating expenses. For the six months ended June 30, 2009, M-I SWACO operating income was $268.8 million or 12.4 percent of revenues. After excluding $22.3 million in costs incurred in connection with cost reduction measures, operating income was
13.4 percent of revenue. The margin decline is, again, attributable to the sharp reduction in revenue volumes and product mix factors. On an absolute dollar basis, operating income fell $151.3 million below the levels reported in the first half of 2008. After adjusting for charges associated with cost reduction efforts, operating income declined $129.0 million from the prior-year level influenced by the decline in revenues on gross profit levels and partially offset by reduced variable-related operating expenses.
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Smith International Inc. is a worldwide supplier of premium products and services to the oil and gas exploration and production industry the petrochemical industry and other industrial markets. The company provides a comprehensive line of technologically-advanced products and engineering services including drilling and completion fluid systems solids-control equipment waste-management services three-cone and diamond drill bits fishing services drilling tools underreamers casing exit and multilateral systems packers and liner hangers. Smith International Inc. has a market cap of $5.71 billion; its shares were traded at around $26.03 with a P/E ratio of 9.7 and P/S ratio of 0.5. The dividend yield of Smith International Inc. stocks is 1.9%. Smith International Inc. had an annual average earning growth of 22.5% over the past 10 years. GuruFocus rated Smith International Inc. the business predictability rank of 2.5-star.
Highlight of Business Operations:
M-I SWACO primarily provides drilling and completion fluid systems, engineering and technical services to the oil and gas industry. Additionally, these operations provide oilfield production chemicals and manufacture and market equipment and services used for solids control, particle separation, pressure control, rig instrumentation and waste management. M-I SWACO is significantly influenced by its exposure to the global offshore market, which constitutes just over 50 percent of the revenue base, and to exploration and production spending for land-based projects outside of North America, which contributes approximately one-third of the divisions revenues. Offshore drilling programs, which accounted for 17 percent of the worldwide rig count during the first six months of 2009, are generally more revenue intensive than land-based projects due to the complex nature of the related drilling environment. For the three months ended June 30, 2009, revenues for the M-I SWACO segment were $1.01 billion a decrease of 21 percent from the prior-year period. The revenue decline was concentrated in the United States and the Europe/Africa region. Lower U.S. volumes reflected the 52 percent downturn in U.S. drilling activity and, to a lesser extent, reduced exploration and development activity in the Gulf of Mexico. The Europe/Africa operations were impacted by reduced customer spending in the Caspian and North Sea markets, lower land-based drilling in Russia and the strengthening of the U.S. dollar relative to certain key European currencies in which a material portion of business is transacted. For the six-month period, M-I SWACO reported revenues of $2.17 billion 14 percent below the amounts reported in the first half of 2008. The revenue decline was attributable to the reduced number of shallow-water drilling programs in Europe/Africa and the Middle East regions as well as lower demand in the U.S. onshore market, partially offset by a 19 percent expansion in deepwater business volumes.Operating income for the M-I SWACO segment was $121.3 million for the three months ended June 30, 2009 reflecting operating margins of 12.0 percent. After excluding severance charges of $3.0 million recorded in the June 2009 period, operating income was 12.3 percent of revenues. The margin decline reflects the impact of lower business volumes and, to a lesser extent, the loss of a higher proportion of environmental waste management and other service-based offerings which generate better overall margins. On an absolute dollar basis, operating income declined $91.0 million below the prior years level. After considering charges related to cost reduction initiatives, operating income fell $88.0 million period-to-period as the impact of lower revenue volumes on gross profit levels were partially offset by reduced variable-based operating expenses. For the six months ended June 30, 2009, M-I SWACO operating income was $268.8 million or 12.4 percent of revenues. After excluding $22.3 million in costs incurred in connection with cost reduction measures, operating income was
13.4 percent of revenue. The margin decline is, again, attributable to the sharp reduction in revenue volumes and product mix factors. On an absolute dollar basis, operating income fell $151.3 million below the levels reported in the first half of 2008. After adjusting for charges associated with cost reduction efforts, operating income declined $129.0 million from the prior-year level influenced by the decline in revenues on gross profit levels and partially offset by reduced variable-related operating expenses.
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