Smith International Loses $24.8 Million in 1st Quarter
Blaming the cost of its massive retrenchment, along with the continuing decline in domestic oil drilling, Smith International reported that it lost $24.8 million in the first quarter. The company reported a $10.3-million loss for the first quarter of 1985. First-quarter revenue dropped 19% to $141.4 million from $174.9 million.
Smith, a Newport Beach oil field equipment firm, filed for bankruptcy protection in early March after being ordered by a federal judge to pay $205 million in damages to Hughes Tool in a patent infringement suit.
Loren Carroll, Smith’s chief financial officer, said an “unprecedented decline” in domestic rig activity in the first quarter caused the company’s domestic revenue to plunge 33% to $70 million from $104.4 million. In the same period, he said, the company’s revenue from international sales increased to $71.4 million from $70 million.
Carroll said Smith’s first-quarter results also were hurt by $12 million in expenditures related to employee layoffs, relocations and division consolidations that the company has made in an effort to cut its operations to fit the shrinking demand for its products.
During the first quarter, Smith consolidated seven operating divisions into three and laid off about 1,600 employees worldwide, reducing its work force to 5,600 from 7,200.
He said the number of domestic drilling rigs operating in the country during the quarter declined to about 1,000 from about 1,900.