Smith International posted net income of $12 million for the first quarter, largely due to changes in accounting. A year ago, Smith posted a $24.8-million loss.
Revenue fell 50%--to $71.6 million from $141.4 million a year ago--due to "the worldwide decline in drilling activity compounded by continued intense price competition," the Newport Beach oil services company said.
The profitable first quarter resulted not from operations, but from a $31-million gain from changes in accounting related to Smith's pension plans and employee benefits.
Smith filed for protection under Chapter 11 of the federal bankruptcy code in March, 1986, a few days after a Los Angeles federal judge ordered the company to pay a $205-million judgment to its archrival Hughes Tool Co. The ruling stemmed from a 14-year-old patent infringement lawsuit.