Smith Earnings, Stock Painted in Red

HOUSTON (TheStreet) -- Profit slipped a whopping 87%. Revenue fell 22%.

The numbers just weren't pretty for oil and gas drilling servicer Smith International(SII Quote). Striking declines in natural gas production and exploration in North America, along with pricing pressures, served as a backdrop as the company missed on most profit and sales estimates.

And investors decided to pile on, sending shares of Smith plunging 7% in midday trading.

On Tuesday, Smith said net income fell to $24.4 million, or 11 cents per share, compared to the year-ago period when the Houston-based company posted a profit of $183.3 million, or 91 cents per share.

After excluding certain charges, Smith said earnings would have come to 15 cents per share.

Revenues shrank to $1.94 billion from $2.49 billion in the year-earlier quarter.

"Our second quarter results reflect the unprecedented collapse in North American drilling activity which has led to lower volumes and a very competitive pricing environment," CEO John Yearwood said in a press release. "While we believe it's unlikely that natural gas fundamentals will support U.S. activity growth in the back half of 2009, we do believe pricing in our oilfield-related product lines has stabilized."

Earlier in the day, National Oilwell Varco(NOV Quote) said its second quarter profit fell by 48%.

Shares of National were also changing hands down 4.6%, or $1.72, at $35.72

Others in the services arena weren't doing much better in the afternoon today. Baker Hughes(BHI Quote) was slipping 3.7%, while Cameron International(CAM Quote) was losing 5.5%.