Hydril Expects Fourth Quarter 2003 Revenue to be Down Sequentially
HOUSTON, Dec. 17 /PRNewswire-FirstCall/ -- Hydril today announced that it
expects fourth quarter revenue to be down slightly and operating income to be
flat compared to the third quarter of 2003. A favorable product mix shift
within premium connections and reduced tax consulting expenses are expected to
support operating income despite reduced revenue. These results are below the
company's previous expectations. Financial results for the company's fourth
quarter ending December 31, 2003 will be discussed in a conference call
scheduled to occur during the week of February 2, 2004.
Fourth quarter revenue in the pressure control segment is expected to be down
approximately 10% from the third quarter of 2003, due principally to weaker
aftermarket spare parts orders. Previously, the company had expected the
aftermarket portion of its pressure control business to be slightly higher in
the fourth quarter compared to the third quarter. In addition, recently
announced plans to reduce capital expenditures by some drilling contractors have
created a general spending reluctance that is negatively affecting aftermarket
spares sales. As anticipated, revenue from capital equipment backlog will be
approximately flat in the fourth quarter compared to the third quarter.
For the premium connection segment, revenue for the fourth quarter is expected
to be approximately flat with the third quarter, which is lower than previously
anticipated. Contrary to previous expectations, U.S. distributors continue to
deplete their inventories in spite of a rising deep formation rig count. While
distributor orders were trending up at the end of the third quarter, they have
subsequently weakened during the fourth quarter, and as a result U.S. revenue
will be down sequentially. The company's international premium connection
business is expected to be up for the fourth quarter, as the company had
anticipated.
Hydril, headquartered in Houston, Texas, is engaged worldwide in engineering,
manufacturing and marketing premium connections and pressure control products
used for oil and gas drilling and production.
Forward-Looking Statements This press release contains forward-looking statements concerning expected
fourth quarter results. These statements relate to future events and the
company's future financial performance, including the company's business
strategy, and involve known and unknown risks and uncertainties. These risks,
uncertainties and assumptions, many of which are more fully described in Hydril
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003
filed with the Securities and Exchange Commission, include, but are not limited
to, the impact of changes in oil and natural gas prices and worldwide and
domestic economic conditions on drilling activity and demand for and pricing of
Hydril's products, the impact of geo-political and other events affecting
international markets and trade, Hydril's ability to remain on the leading edge
of technology in its products and maintain and increase its market share, the
impact of international and domestic trade laws, the loss of or change to
distribution methods of premium connections in the U.S. and Canada, overcapacity
in the pressure control industry, and high fixed costs that could affect the
pricing of Hydril's products. These factors may cause Hydril's or the
industry's actual results, levels of activity, performance or achievements to be
materially different from those expressed or implied by the forward-looking
statements. DATASOURCE: Hydril Company CONTACT: Sue Nutt, Investor Relations of Hydril Company, +1-281-985-3532 Web site: http://www.hydril.com/
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