Smith International Under Review : Oil Services Firms Put in ‘CreditWatch’ List

Smith International Inc., along with several other oil-related companies, has been added to Standard & Poor’s “CreditWatch” list as a result of the slide in oil prices, the New York securities rating firm reported Tuesday.

Although the BBB-senior debt rating of the Newport Beach oil tools maker remains unchanged, its addition to the CreditWatch roster means that the financially troubled company’s bond rating is under review and could be downgraded.

In all, 13 companies with “aggressive leverage structures, uncertain cash flow prospects, or both” were placed on CreditWatch, Standard and Poor’s said. The companies include Fort Worth-based Gearhardt Industries Inc.; Phillips Petroleum Co. of Bartlesville, Okla., and Zapata Corp. of Houston.

Smith has been hard-hit by the depression in the oil field services industry brought on by lower crude oil prices. As previously reported, Smith posted a net loss of $58.3 million during the nine months ended Sept. 30, contrasted with net income of $7.5 million a year earlier.

In addition, a federal trial is under way to determine how much in damages the company will pay Hughes Tool Co. as a result of a patent-infringement suit it lost last year. Houston-based Hughes has asked for $1.2 billion, almost twice the $747 million in revenues Smith reported in 1984.

In a related development, Baker International Corp., also buffeted by the recent decline in oil prices, on Tuesday hit a new 12-month low in trading on the New York Stock Exchange.

Common shares of the Orange-based manufacturer of oil field equipment maker sank to $14 each Tuesday before rebounding slightly and closing at $14.13, down 25 cents for the day and off 25 cents from the previous 12-month low of $14.38 a share.