On a sequential basis, first quarter revenues were slightly above the record levels posted in the fourth quarter of 2003. In North America, overall business was up slightly with an 8 percent increase in sequential revenues. Eastern Hemisphere revenues declined 7 percent, primarily due to the impact of the seasonal decline in North Sea activity. The first quarter 2004 operating income improved over 7 percent sequentially, reflecting primarily the benefits of ongoing supply chain initiatives. Diluted earnings per share increased to $0.38 in the first quarter from $0.36 in the fourth quarter of 2003.
The company previously announced it adopted Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, to expense the fair value of employee stock-based compensation, which is the "preferred" method of accounting. The company selected the prospective method of adoption for recording stock-based compensation expense. Under this method, the fair value of stock-based compensation granted subsequent to January 1, 2003 is recognized as an expense over the vesting period. The 2003 results and the current quarter reported results reflect stock-based compensation expense.
Revenues for the quarter were $403.7 million, 17 percent above the prior year and slightly above the prior quarter's record level revenues. Geographically, all regions showed improvements from the 2003 first quarter, with growth of 47 percent and 35 percent in Latin America and the Middle East regions, respectively. Sequentially, the strong revenue improvements in Canada and the Middle East offset the severe seasonal declines in the North Sea.
Operating income of $76.7 million was 19 percent higher than the same period of the prior year and 3 percent higher than the preceding quarter.
First quarter revenues of $323.1 million were 33 percent higher than the first quarter of 2003 with increases of 36 percent and 27 percent in North America and international markets, respectively. Sequentially, revenues were slightly above the prior quarter.
The current quarter's operating income of $35.5 million improved 16 percent as compared to the same period of the prior year and 9 percent compared to the fourth quarter of 2003.
Research and Development
The company's Research and Development expenditures were $19.4 million, in line with plan and 4 percent below the prior quarter.
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