Smith International Inc. posted net income of $12 million for the first quarter, largely due to changes in accounting. In the quarter a year ago, Smith suffered a $24.8-million loss.
Revenues 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 in a prepared statement.
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.