Revenues for the three months ended September 30, 2004 were $1.1 billion, five percent above the second quarter of 2004 and 21 percent higher than the prior year quarter. The sequential revenue growth was reported in the Western Hemisphere, as higher land-based drilling activity more than offset a $15 million revenue reduction from weather-related work disruptions in the Gulf of Mexico. Eastern Hemisphere revenues were comparable with the second quarter of 2004 as increased market penetration in the Far East market was offset by the impact of activity declines in Europe/Africa. Year-over-year, the revenue growth was primarily influenced by a 16 percent improvement in U.S. land-based drilling activity and, to a lesser extent, new contract awards in the Eastern Hemisphere markets.
M-I SWACO's third quarter revenues totaled $565.4 million, three percent above the second quarter of 2004 and 18 percent higher than the prior year period. The sequential quarter revenue growth was influenced by the seasonal drilling rebound in Canada and increased spending in certain Latin American markets, including Mexico and Argentina. U.S. revenues showed a slight increase over the amounts reported in the second quarter of 2004, as higher land-based revenue volumes were largely offset by weather-related revenue reductions in the U.S. offshore market, which resulted in lower sales of high-margin synthetic fluid products. Compared to the prior year quarter, approximately two-thirds of the revenue growth was generated in areas outside of North America, reflecting new contract awards in certain international markets and increased exploration and production spending in the Former Soviet Union, the Middle East and the Far East markets. To a lesser extent, increased land-based North American drilling activity also contributed to the year-over-year revenue improvement.
Smith Technologies reported revenues of $126.8 million, five percent higher on a sequential quarter basis and 21 percent above the September 2003 period. The improvement over the second quarter primarily reflects increased revenue volumes associated with the seasonal drilling recovery in Canada. Year-over-year, revenues increased at a rate significantly in excess of the nine percent improvement in worldwide drilling activity. The favorable comparison reflects increased customer demand for diamond bit products specifically designed for the North American rental market and, to a lesser extent, price increases implemented during the past 12 month period.
Smith Services' revenues totaled $124.6 million, a seven percent improvement on a sequential quarter basis and 21 percent above the third quarter of 2003. The sequential revenue growth was driven by increased demand for tubular products in the U.S. market and the impact of incremental revenues from the CanFish acquisition completed in July 2004. After excluding the impact of tubular sales, base revenues were comparable with the second quarter as work disruptions in key drilling markets impacted revenue volumes. The revenue increase from the prior year quarter was reported in the Western Hemisphere markets and primarily reflected increased customer spending across drilling-related product and service lines.
Wilson reported revenues of $302.4 million, nine percent higher on a sequential quarter basis and 27 percent above the prior year period. Higher sales to the upstream energy segment, influenced by the seasonal drilling recovery in Canada, accounted for the majority of the sequential revenue improvement. Industrial and downstream revenues, which grew 12 percent from the second quarter of 2004 driven by increased project business in the refining and engineering and construction markets, also contributed to the sequential revenue increase. Higher reported line pipe sales in the U.S. market combined with the implementation of new contract awards in the industrial and downstream segment accounted for the majority of the revenue improvement over the prior year quarter.
Commenting on the results, Chairman and CEO Doug Rock stated, "The third quarter of 2004 was another solid revenue and earnings performance for Smith. We anticipate a long line of continued, future year-over-year and sequential earnings improvements. Our confidence is supported by tight supply and demand fundamentals and our expectation that customer spending will accelerate further in 2005 and beyond."
Loren Carroll, Executive Vice President, also noted that, "We're pleased with our third quarter results, especially in light of the disruptions we've experienced during this quarter that negatively impacted some of our most significant geographic areas. As work resumes in these markets, and we realize the impact of our recently announced price increases, we're optimistic that we'll see improved profitability levels."
Most Popular Articles
From the Career Center
Jobs that may interest you