Smith International 1Q Profit Falls 45 Pct

HOUSTON (AP) — Oilfield services company Smith International Inc. on Monday said its first-quarter profit fell 45 percent, driven by a sharp decline in drilling activity amid the global economic downturn.

Earnings for the quarter slid to $96.9 million, or 44 cents per share, compared with $175 million, or 87 cents per share, during the same period last year.

Results include a $34.8 million charge related to severance costs from the 14 percent reduction in North American personnel levels. Excluding this one-time charge, Smith reported income of $114.5 million, or 52 cents per share.

Analysts surveyed Thomson Reuters estimated, on average, a profit of 57 cents per share. Analysts typically exclude nonrecurring items.

Revenue climbed 1.7 percent to $2.41 billion, from $2.37 billion in the prior-year period. Analysts expected revenue of $2.56 billion, on average.

"We believe the North American business environment will continue to be challenging until natural gas fundamentals support more favorable commodity prices for our customers," said Chief Executive John Yearwood.

He added, "We believe fundamentals should improve over the coming quarters, which provide a favorable long-term outlook for our industry and our business in particular as customers seek to enhance the value of their upstream spending programs."

Shares of Smith fell $2.26, or 8.1 percent, to $25.51 in afternoon trading.