Smith International Fourth-Quarter Profit Rises

HOUSTON -- Oilfield services company Smith International (SII Quote) on Thursday said its fourth-quarter profit rose 19%, driven by earnings from its W-H acquisition and higher demand for tubular products, but warned of an "uncertain" 2009 outlook.

Net income lifted to $199.2 million, or 91 cents per share, from $167 million, or 83 cents per share, during the prior-year period.

The results include a $19.4 million charge related to a loss on an interest rate derivative contract. Excluding the charge, the company reported income from continuing operations of $218.6 million, or $1 per share.

Revenue climbed 33% to $3.06 billion, from $2.30 billion during the same quarter in 2007. The company acquired the W-H Energy in August 2008 for roughly $3.2 billion.

Analysts polled by Thomson Reuters forecast a profit of $1.02 per share on revenue of $3.04 billion. Analysts typically exclude one-time items.

For the 2008 fiscal year, Smith reported earnings of $767.3 million, or $3.68 per share, on revenue of $10.77 billion. In 2007, the company earned $647.1 million, or $3.20 per share, with sales of $8.76 billion.

The company's Chief Executive John Yearwood said, "The 2009 business outlook involves a significant amount of uncertainty resulting from the global economic downturn and extremely tight credit markets."

He added that the company's priority in 2009 will be on adjusting its cost structure to match activity levels.

Shares of Smith fell $2.93, or 11.3%, to $22.99 in midday trading.