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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: SJS who wrote (26043)	7/20/1998 5:30:00 PM
From: P.Prazeres	Read Replies (1) \| Respond to of 95453

Smith Intl optimistic about second half HOUSTON, July 20 (Reuters) - Smith International Inc. Chief Executive Doug Rock said Monday the Houston-based oilfield products and services firm was optimistic about prospects for the second half of 1998. Rock said in a conference call that Smith plans to implement price increases during the remainder of the year. ''For the second half of 1998, we don't see significant business downside from today...as long as product pricing holds and oil prices don't collapse further. ''We're planning product and service price increases for the rest of the year and we're expanding our business in areas of geographic and product promise,'' he said. Rock said the present imbalance between oil supply and demand was not as dramatic as in 1986 and that drilling and production activity would have to pick up again. ''We don't see a lot of pricing pressure, just some minor pressure in some areas. So we're looking pretty optimistically toward the second half from where we sit today,'' he said. Rock said Smith International plans to press ahead with ''normal'' price increases for many of its products but will implement ''strong'' price increases for new products. Despite a decline in drilling activity as a result of the low price of oil, prices for Smith International products and services are holding up well, he said. ''I think the pricing environment is reasonably healthy...I think it's because many of us have been able to niche our products to particular areas,'' he said. Chief Financial Officer John Kennedy said the acquisition of drilling materials firm Wilson Industries, which closed at the end of April, was neutral for second quarter earnings but would boost earnings in subsequent quarters. ''Going forward, it will be accretive in the second half because in the quarter just past we had very little in terms of consolidation savings,'' he told the conference call. ''The larger consolidation savings are going to come toward the end of the year and into the (1999) first quarter,'' he said. Smith International's second quarter earnings included an after-tax charge of $37.2 million, or $0.78 per diluted share, to cover the cost of the acquisition and restructuring measures. Smith is a leading supplier of drilling fluids and drill bits to the oil and gas industry.