(RTTNews) - Oilfield services company Smith International, Inc. (SII: News ), Monday, reported a sharp fall in profit for the first quarter, mainly reflecting severance charge, higher expenses, as well as sharp decline in drilling activity associated with the global economic slowdown. On an adjusted basis, the Houston, Texas-based company's quarterly earnings per share fell 40%, and missed market projections.First-quarter net income fell 41.4% to $144.19 million from last year's $246.11 million. Net income attributable to Smith declined to $96.94 million or $0.44 per share from $174.99 million or $0.87 per share in the prior year quarter.The latest quarter results included a $34.79 million charge, primarily reflecting employee separation costs associated with a 14% reduction in North American personnel levels.Excluding the charge, the company reported net income of $114.5 million or $0.52 per share for the current year quarter, in comparison to $0.87 per share last year.On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.57 per share for the quarter. Analysts' estimates typically exclude special items. In the preceding fourth quarter, Smith had recorded net income of $268.42 million, net income attributable to shareholders of $199.17 million or $0.91 per share, and adjusted net income of $218.6 million or $1.00 per share.Revenues for the first quarter rose 2% to $2.41 billion from $2.37 billion in the same period previous year, but missed Wall Street analysts' consensus estimate of $2.56 billion.
The company attributed the revenue growth mainly to the addition of the W-H Energy operations, which masked the decline in North American business volumes. From a pro forma perspective, revenues dropped 7% from last year, comparing favorably to the 16% reduction in related activity levels.On a sequential basis, first-quarter revenues fell 21% from $3.06 billion recorded in the fourth quarter.Meanwhile, total costs and expenses in the first quarter grew to $2.17 billion from last year's $1.99 billion, resulting in a decline in operating income to $241.68 million from $378.81 million a year ago.In the quarter, non-distribution revenues rose 2% to $1.84 billion from last year's $1.80 billion. The M-I SWACO segment's first-quarter revenues totaled $1.16 billion, down 6% from last year, while Smith Oilfield segment revenues grew 19% from last year to $682.40 million due to the addition of the W-H operations.
The company attributed the revenue growth mainly to the addition of the W-H Energy operations, which masked the decline in North American business volumes. From a pro forma perspective, revenues dropped 7% from last year, comparing favorably to the 16% reduction in related activity levels.On a sequential basis, first-quarter revenues fell 21% from $3.06 billion recorded in the fourth quarter.Meanwhile, total costs and expenses in the first quarter grew to $2.17 billion from last year's $1.99 billion, resulting in a decline in operating income to $241.68 million from $378.81 million a year ago.In the quarter, non-distribution revenues rose 2% to $1.84 billion from last year's $1.80 billion. The M-I SWACO segment's first-quarter revenues totaled $1.16 billion, down 6% from last year, while Smith Oilfield segment revenues grew 19% from last year to $682.40 million due to the addition of the W-H operations.
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