On a sequential basis, fourth quarter revenue of $129.6 million increased 10%, operating income of $35.4 million increased 27%, and net income of $23.9 million increased 22%. Compared to the fourth quarter of 2005, revenue increased 14%, operating income increased 15%, and net income increased 12%.
For the year-ended December 31, 2006, earnings per diluted share were $3.88, up 27% when compared to $3.05 per diluted share in 2005. For the year, revenue of $503 million was up 34% from the prior year, operating income of $132.2 million was up 26%, and net income of $91.3 million was up 25%.
Chris Seaver, Chairman, President and CEO, commented, "We had a great quarter and Hydril's financial performance for 2006 improved for the third consecutive year. In addition, each of the past three years was the best performance in over twenty years. Our outlook continues to be strong, and we expect our 2007 financial performance to be better than 2006. We remain focused on providing the best performing, most reliable technologies to drill the most difficult wells, while supporting every customer with the level of service that keeps them drilling."
Premium Connection Segment
Sequentially, fourth quarter revenue for Hydril's premium connection segment increased 10% to $70.2 million, operating income increased 35% to $25.3 million, and operating margin improved to 36% from 29%. The majority of the revenue increase was due to higher activity in international markets, while North America revenue increased slightly. The improvement in operating margin was the result of better plant efficiencies due in part to higher threading volumes, and to product mix.
Pressure Control Segment
Sequentially, fourth quarter revenue for the pressure control segment increased 11% to $59.3 million and operating income increased 11% to $16.1 million. Capital equipment revenue increased 8% to $35.2 million and aftermarket revenue increased 16% sequentially to $24.1 million. The increase in capital equipment revenue was principally the result of progress made on offshore blowout prevention system projects.
During the fourth quarter, we received record capital equipment purchase orders totaling $254 million. At the end of the quarter, the capital equipment backlog reached $508 million, up from $289 million at September 30, 2006, and up from $157 million at December 31, 2005.
Share Repurchase Program
During the fourth quarter, the company repurchased $73 million of stock under the $150 million share repurchase program authorized by the Board of Directors in early November 2006. For the year 2006, the company repurchased a total of $173 million of stock which included a $100 million share repurchase program which was completed in the third quarter.
As more fully described on our website at www.hydril.com in the "Investor Info" tab under "Market Indicators", our principal indicators are: (1) the U.S. rig count for rigs drilling at targets deeper than 15,000 feet, (2) Gulf of Mexico rigs under contract, (3) the international rig count, (4) worldwide offshore rigs under contract, and (5) the total U.S. land rig count.
Hydril, headquartered in Houston, Texas, is engaged worldwide in engineering, manufacturing and marketing premium connection and pressure control products used for oil and gas drilling and production.
Most Popular Articles
From the Career Center
Jobs that may interest you