Grant Prideco Lowers Third Quarter Forecast

Grant Prideco announced that its third quarter is expected to fall below its $1.04 per share due to charges at its ReedHycalog segment. Revenues are expected to remain at approximately $550 million.

The Company is consolidating four of its U.S. drill bit manufacturing facilities into a new facility in Conroe, Texas. It expects third quarter charges of $15 million ($0.08 per share) due to the consolidation including unabsorbed manufacturing costs at the four closed plants and startup expenses of the Conroe facility. Also, an inventory valuation adjustment and direct costs associated with moving equipment must also be considered.

Third quarter forecasted earnings are expected to be $0.95 - $0.97 per diluted share. The fourth quarter has also been updated and has earnings forecasted at $1.10 - $1.12 per share. Relocating people and equipment to the new facility was forecast at an additional $0.03 per share.

Grant Prideco, headquartered in Houston, is a leader in drill stem technology development and drill pipe manufacturing, sales and service; a drill bit and specialty tools, manufacturing, sales and service; and a provider of high-performance engineered connections and tubular products and services.