Smith International, Inc. (NYSE: SII) announced second quarter income from continuing operations of $71.7 million, or $0.29 per diluted share, excluding net after-tax charges. Reported net income for the second quarter of 2010 was $65.1 million, or $0.26 cents per diluted share, on revenues of $2.30 billion. The impact of current quarter charges for transaction costs associated with the proposed merger with Schlumberger and Venezuela currency-related losses were partially offset by a remeasurement gain reported in connection with the purchase of the remaining 65 percent interest in @Balance B.V.
On a comparable basis, second quarter 2010 earnings from continuing operations were more than double those of the second quarter of 2009, which totaled $32.1 million on revenues of $1.94 billion. Sequential quarter earnings from continuing operations, net of charges, increased 54 percent as compared to the $46.5 million on revenues of $2.14 billion reported for the first quarter of 2010.
The Company’s financial performance in the second quarter of 2010 was favorably influenced by the continued expansion of U.S. land drilling activity, which more than offset the impact of the seasonal drilling downturn in Canada.
Consolidated revenues rose 7 percent on a sequential-quarter basis and 18 percent from the comparable prior-year quarter. The increase over the prior period was concentrated in the U.S. market where revenues increased 19 percent as compared to the average M-I SWACO rig count which rose 12 percent. Outside the United States, significant growth reported in the Middle East/Asia region was offset by the impact of the seasonal spring break up on Canadian drilling activity and a moderate decrease in Latin America.
M-I SWACO segment revenues were $1.16 billion for the second quarter of 2010, a 4 percent increase on a sequential basis and 14 percent above the prior-year period. The revenue growth was concentrated in the Eastern Hemisphere, principally in Vietnam, Indonesia, Malaysia and Kuwait. The impact of a 21 percent sequential increase in land-based revenue in the United States was partially offset by the seasonal decline in Canada, lower customer spending in Latin America, and the impact of the deepwater drilling moratorium in the Gulf of Mexico announced in May 2010.