Consolidated revenues for the three months ended March 31, 2006 were $1.7 billion. Revenues were ten percent above the fourth quarter of 2005 and 31 percent higher than the prior-year period -- marking the highest sequential and year-over-year growth rates achieved to date this cycle. Oilfield segment revenues increased 11 percent over the December 2005 quarter and 33 percent over the prior-year period. Increased exploration and production spending in regions outside of North America combined with the recovery in the U.S. deepwater market contributed the majority of the Oilfield segment sequential revenue growth.
Doug Rock, Chairman and CEO, commented, "Although we're nearly three and a half years into an oilfield service industry uptrend, our revenues and earnings are accelerating. Smith is positioned as one of the leading oilfield service providers in markets outside of North America, and this shows in our first quarter 2006 results. All six of Smith's regional geographic markets grew on a sequential quarter basis, with the slowest growth region increasing seven percent. That's balanced performance on a worldwide scale. Based on our first quarter results and prospects for the remainder of the year, we believe earnings in the range of $2.15 to $2.25 per share are a reasonable expectation for Smith in 2006."
M-I SWACO's first quarter revenues totaled $802.6 million, 10 percent above the fourth quarter of 2005 and 30 percent higher on a year-over-year basis. Business levels in markets outside of North America grew nine percent over the fourth quarter of 2005, accounting for the majority of the sequential revenue increase. Higher customer spending in major offshore markets, including West Africa, the North Sea and Latin America, combined with an increase in the number of land-based drilling projects in the Former Soviet Union contributed to the period-to-period improvement. To a lesser extent, increased drilling activity in the revenue-intensive U.S. deepwater market favorably impacted the sequential revenue comparison.
Smith Technologies reported first quarter revenues of $179.4 million, seven percent higher on a sequential quarter basis and 26 percent above the prior year quarter. The sequential revenue comparison was influenced by the inclusion of several Eastern Hemisphere export orders in the fourth quarter of 2005. After excluding export sales, revenues were 10 percent above the December quarter and compared to a five percent increase in corresponding activity levels. The sequential revenue increase was driven by the recovery in the U.S. offshore market, higher spending related to North American land-based projects and increased customer demand for recent product introductions, including our Sharc(TM) series of diamond drill bits.
Smith Services' revenues totaled $229.6 million, a 17 percent improvement on a sequential quarter basis and 54 percent above the first quarter of 2005. The sequential revenue growth was influenced by increased tubular sales volumes in the United States, including the HEVI-WATE(TM) product line. After excluding the effect of tubular sales, revenues grew 11 percent sequentially and 32 percent above the March 2005 quarter. The majority of the core business growth over the December period was driven by increased U.S. drilling activity combined with accelerating demand for remedial products, including the RHINOŽ Reamer downhole tool which experienced a 48 percent increase in sales volumes period-to-period.
Wilson reported revenues of $470.5 million, seven percent higher on a sequential quarter basis and 24 percent above the prior-year period. The timing of line pipe project spending by customers in the United States impacted the sequential revenue comparison. Excluding the impact of tubular sales, revenues increased 11 percent over the December 2005 period. The majority of the sequential revenue growth was reported in the upstream energy operations, largely reflecting the increase in North American drilling and completion activity.
Commenting on the results, Loren Carroll, Executive Vice President, stated, "Our results for the first quarter of 2006 signal another strong revenue and earnings performance for Smith. Business volumes improved across all geographic regions, enabling Smith to report record results. Oilfield operating margins currently stand at 18.1 percent of revenues -- 120 basis points higher on a sequential quarter basis and 300 basis points above the March 2005 quarter."
Smith International, Inc. is a leading worldwide supplier of premium products and services to the oil and gas exploration and production industry, the petrochemical industry and other industrial markets through its four principal business units -- M-I SWACO, Smith Technologies, Smith Services and Wilson.
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