Oil field services company Smith International (NYSE:SII) reported third quarter earnings before the market opened this morning. EPS reached $1.00 on revenues of $2.85 billion. Analysts were expecting EPS of $0.97 and revenues of $2.71 billion. A pro forma calculation accounting for the acquisition of W-H Energy Services, which was completed in late August, increased revenues to $3.07 billion.
Excluding the effects of the W-H acquisition, Smith’s revenues grew 8%sequentially and 21% year-over-year. The company attributed the growthto more drilling in Canada and increased investment in infrastructurefor unconventional oil and gas projects in the US. Smith also increasedits full-year EPS guidance by a nickel, to $3.83-$3.88.
The company’s chairman and CEO pointed out that oil at $60/b is morethan six times higher than its low price in 1998. He also highlightedan obvious point: "There’s plenty of profit potential at today’sindustry price structure." Somebody had to say it.
This closed at $26.49 and is up roughly $1.00 right before the open. Its 52-week trading range is $26.23 to $88.40.
Paul Ausick
October 28, 2008
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