Hydril Says 1Q06 Earnings Up 49% from Last Year
Hydril (Nasdaq: HYDL) reported earnings for the first quarter ended March 31, 2006 of $0.94 per diluted share, up 7% sequentially from $0.88 reported in the fourth quarter of 2005, and up 49% from $0.63 reported for the first quarter of 2005.
On a sequential basis, first quarter revenue of $114.1 million was essentially flat, while operating income of $32.9 million was up 7%, and net income of $22.7 million was up 6%. Compared to the first quarter of 2005, revenue and operating income increased 45% and 49%, respectively, and net income increased 51%.
Chris Seaver, President and CEO, commented, "Continued growth in our premium connection markets resulted in improved financial performance for the first quarter. Our outlook remains strong for both of our segments, and we remain focused on our commitment to meeting the growing demands of our customers. The backlog of capital equipment for our pressure control segment increased 48% during the quarter, and includes orders received from offshore drilling contractors for deepwater blowout prevention systems."
Premium Connection Segment
First quarter revenue for Hydril's premium connection segment remained steady sequentially, while operating income increased 16% to $27.5 million. Operating margin of 37% was up from 33% in the prior quarter as a result of higher product sales and less lower-margin pipe sales.
Pressure Control Segment
Sequentially, first quarter revenue for the pressure control segment increased slightly to $40.5 million and operating income decreased 9% to $10.4 million. Aftermarket revenue was essentially flat with the prior quarter and capital equipment revenue increased 2% sequentially to $19.7 million. Operating margin for the first quarter was 26%, down from 28% for the fourth quarter 2005 due to product mix.
The capital equipment backlog was $233 million at March 31, 2006, up 48% from $157 million at December 31, 2005, and up from $30 million at March 31, 2005. Deliveries for this backlog are scheduled into the second half of 2008.
As more fully described on our website at www.hydril.com on the
"Market Indicators" page, our principal business drivers are: (1) the
U.S. rig count for rigs drilling at targets deeper than 15,000 feet,
(2) the number of Gulf of Mexico rigs under contract, (3) the
international rig count, (4) the worldwide offshore rig count, and (5)
the total U.S. rig count.
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