SMITH INTERNATIONAL, INC.
P.O. BOX 60068
HOUSTON, TX 77205-0068
WEBSITE ADDRESS: smith.com
Tuesday, January 30, 2007
||Margaret K. Dorman
||Chief Financial Officer
SMITH INTERNATIONAL, INC. REPORTS
FOURTH QUARTER EARNINGS OF 71 CENTS PER SHARE
HOUSTON, Texas (January 30, 2007)...Smith International, Inc. (NYSE: SII) today announced
fourth quarter net income of $143.0 million, or 71 cents per share on a diluted basis, on revenues
of $2.00 billion. The strong performance of the Eastern Hemisphere operations, which posted
revenue growth of 40 percent over the prior year period due to the continuing expansion in drilling
activity, contributed to the improved financial results. Net earnings for the comparable prior
year quarter, which included a one-cent charge associated with a drill bit patent settlement, were
$88.6 million, or 44 cents per share, on revenues of $1.53 billion.
Net income for the third quarter of 2006 totaled $132.9 million, or 66 cents per share, on
revenues of $1.91 billion. The sequential revenue improvement was attributable to a 10 percent
increase in Eastern Hemisphere business volumes, influenced by growth in West Africa, the Middle
East and the Former Soviet Union. Sequential earnings grew five cents per share driven by higher
sales of premium fluids in the international offshore market, increased environmental service
equipment rentals and strong demand for drill pipe and other tubular products.
Doug Rock, Chairman and CEO, commented, Our Eastern Hemisphere operations showed strong
sequential and year-over-year revenue and earnings growth in the fourth quarter of 2006, providing
momentum for the current year. We believe 2007 will be a solid growth year for Smith and the
recent surge in seismic survey sales and exploratory drilling provides further evidence that demand
for Smiths products will continue to expand for years to come. Accordingly, we believe the
current Thomson Financial 2007 consensus estimate for Smiths earnings per share is a reasonable
expectation for our performance.