Newpark posted a profit of $7.4 million, or 8 cents per share, compared with a loss of $2.3 million, or 3 cents per share, a year earlier. Revenue rose 4.2 percent to $153.8 million from $147.6 million.

Analysts polled by Thomson Financial expected earnings of 11 cents per share on revenue of $179.2 million, on average.

Discontinued operations generated a $229,000 after-tax loss, including impairments and other charges of $600,000 related to the closure of Newpark's Canadian Environmental Services business. The company posted a loss of $12 million from discontinued operations in the third quarter of 2006.

Newpark agreed last month to sell its U.S. Environmental Services business and shut down substantially all of its Canadian counterpart.

"The sale of the environmental business will significantly strengthen our balance sheet and improve our ability to increase investments in our drilling fluids and mats and integrated services businesses," Chief Executive Paul Howes said in a statement.

Those segments posted declines in operating margins compared with the year-ago period, though margins improved from the second-quarter. Howes said the company still faces "challenges" in the North American markets, though international operations are improving.

Newpark shares fell 27 cents, or 4.6 percent, to $5.66 in morning trading.