On a sequential basis, revenue of $57.5 million was up 15%, operating income of $10.5 million was up 31%, and net income of $7.9 million, which includes the tax credit, was up 51%. Compared to the first quarter of 2003, revenue and operating income were essentially flat, and net income, which includes the tax credit, was up 22%.
Premium Connection Segment
Revenue for Hydril's premium connection segment increased 29% sequentially to $33.4 million and operating income increased 40% to $9.4 million. The increase in revenue and operating income was driven by higher demand for our products in both our international and North American markets which resulted in higher plant utilization worldwide.
Pressure Control Segment
Revenue for Hydril's pressure control segment of $24.1 million and operating income of $4.8 million were flat sequentially. Aftermarket revenue, driven by increasing rig counts, was up 20% sequentially primarily due to higher levels of lower-margin repair and service activity and to slightly higher spare part sales. Capital equipment revenue decreased 23% sequentially due to lower revenue from projects that are complete or nearing completion. At the end of the quarter, the capital equipment backlog stood at $11.9 million, up from $11.5 million at year-end 2003 but down from $23.3 million as of March 31, 2003.
During the quarter Hydril completed a research and experimentation tax credit study and as a result recorded a $0.9 million credit to its income tax provision. The $0.1 million cost of the study was included in corporate SG&A expense for the quarter. The credit covered qualified research and experimentation spending for the two-year period of 2002 through 2003.
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