Hydril Updates Third Quarter 2006 Earnings Expectations
October 04 2006 - 6:55AM
Business Wire
Hydril (Nasdaq:HYDL) expects its third quarter 2006 earnings to be
in the range of $0.79 - $0.84 per diluted share, which is below
previous expectations, due primarily to greater than expected
premium connection inventory reductions by U.S. distributors. In
the United States and Canada, Hydril sells premium connections
through�pipe distributors, who�purchase and hold inventory�for sale
to end-users. While end-user consumption of premium connections in
the field has been fairly stable, concerns over natural gas and
steel prices have led to inventory de-stocking, with distributors
purchasing fewer premium connections than they are selling to
end-users. The third quarter decline in distributor inventories of
premium connections was greater than we previously expected. Chris
Seaver, Hydril's President and CEO, stated "Based on what we are
seeing in the market today, we expect domestic premium connection
revenue to stabilize near the third quarter levels through the end
of the year. In the�longer term,�the fundamental business drivers
have not changed, the U.S. deep formation rig count�continues to be
strong, and we expect revenues to increase�when inventories
stabilize, which we expect sometime near year-end. The
international portion of our premium connection business continues
as we expected, and demand continues to increase in our pressure
control segment." Hydril's pressure control capital equipment
backlog ended the quarter at approximately $289 million, up from
$266 million at the end of the second quarter, and up from $61
million at the end of the third quarter of 2005. Chris Seaver,
President and CEO, will present at the IPAA OGIS Investment
Symposium on Wednesday, October 4, at 2:15 p.m. PDT (4:15 p.m. CDT;
5:15 p.m. EDT). To listen to the live or replay webcast, access the
presentation from www.hydril.com and click on the presentation icon
on the home page. The live or replay webcast can also be accessed
from http://www.investorcalendar.com/CEPage.asp?ID=109780.
Management will discuss financial results for the company�s third
quarter ending September 30, 2006 in a conference call currently
scheduled for October 31, 2006. Hydril, headquartered in Houston,
Texas, is engaged worldwide in engineering, manufacturing and
marketing premium connection and pressure control products used for
oil and gas drilling and production. Forward-Looking Statements
This press release contains forward-looking statements concerning
expected future results. These statements relate to future events
and the company�s future financial performance, including the
company�s business strategy and product development plans, and
involve known and unknown risks, uncertainties and assumptions.
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 June 30, 2006 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 risks associated with fixed-price
contracts, the loss of distribution or change to distribution
methods or inventory practices for premium connections in the U.S.
and Canada, competition from steel mills, limitations on the
availability of pipe for threading, the impact of imports of
tubular goods and of international and domestic trade laws, factors
that could cause our results to vary significantly from quarter to
quarter, the consolidation of end-users, intense competition in our
industry, the risks associated with international operations, the
ability to attract and retain skilled labor, and Hydril�s ability
to successfully develop new technologies and products and maintain
and increase its market share. 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. Hydril (Nasdaq:HYDL)
expects its third quarter 2006 earnings to be in the range of $0.79
- $0.84 per diluted share, which is below previous expectations,
due primarily to greater than expected premium connection inventory
reductions by U.S. distributors. In the United States and Canada,
Hydril sells premium connections through pipe distributors, who
purchase and hold inventory for sale to end-users. While end-user
consumption of premium connections in the field has been fairly
stable, concerns over natural gas and steel prices have led to
inventory de-stocking, with distributors purchasing fewer premium
connections than they are selling to end-users. The third quarter
decline in distributor inventories of premium connections was
greater than we previously expected. Chris Seaver, Hydril's
President and CEO, stated "Based on what we are seeing in the
market today, we expect domestic premium connection revenue to
stabilize near the third quarter levels through the end of the
year. In the longer term, the fundamental business drivers have not
changed, the U.S. deep formation rig count continues to be strong,
and we expect revenues to increase when inventories stabilize,
which we expect sometime near year-end. The international portion
of our premium connection business continues as we expected, and
demand continues to increase in our pressure control segment."
Hydril's pressure control capital equipment backlog ended the
quarter at approximately $289 million, up from $266 million at the
end of the second quarter, and up from $61 million at the end of
the third quarter of 2005. Chris Seaver, President and CEO, will
present at the IPAA OGIS Investment Symposium on Wednesday, October
4, at 2:15 p.m. PDT (4:15 p.m. CDT; 5:15 p.m. EDT). To listen to
the live or replay webcast, access the presentation from
www.hydril.com and click on the presentation icon on the home page.
The live or replay webcast can also be accessed from
http://www.investorcalendar.com/CEPage.asp?ID=109780. Management
will discuss financial results for the company's third quarter
ending September 30, 2006 in a conference call currently scheduled
for October 31, 2006. Hydril, headquartered in Houston, Texas, is
engaged worldwide in engineering, manufacturing and marketing
premium connection and pressure control products used for oil and
gas drilling and production. Forward-Looking Statements This press
release contains forward-looking statements concerning expected
future results. These statements relate to future events and the
company's future financial performance, including the company's
business strategy and product development plans, and involve known
and unknown risks, uncertainties and assumptions. 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 June 30, 2006 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 risks associated with fixed-price contracts,
the loss of distribution or change to distribution methods or
inventory practices for premium connections in the U.S. and Canada,
competition from steel mills, limitations on the availability of
pipe for threading, the impact of imports of tubular goods and of
international and domestic trade laws, factors that could cause our
results to vary significantly from quarter to quarter, the
consolidation of end-users, intense competition in our industry,
the risks associated with international operations, the ability to
attract and retain skilled labor, and Hydril's ability to
successfully develop new technologies and products and maintain and
increase its market share. 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.
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