<PAGE>

                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended March 31, 2002
                               --------------

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from                 to
                               ---------------   ---------------


                        Commission file number 000-31579

                                 HYDRIL COMPANY
             (Exact name of registrant as specified in its charter)

                 DELAWARE                                       95-2777268
      (State or other jurisdiction of                         (IRS Employer
       incorporation or organization)                       Identification No.)

          3300 North Sam Houston Parkway East Houston, Texas 77032-3411
               (Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code   (281) 449-2000
                                                   ------------------

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes  X    No
   -----    ------

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
     Shares outstanding at May 1, 2002:
     Common stock, $.50 par value, 14,411,834 shares outstanding
     Class B common stock, $.50 par value, 7,951,379 shares outstanding
<PAGE>

                                 HYDRIL COMPANY

                                      INDEX

                          PART I--FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>                                                                                           <C>
Item 1.  Financial Statements

     Consolidated Balance Sheets--March 31, 2002 (unaudited) and December 31, 2001              3
     Unaudited Consolidated Statements of Operations--For the Three Months Ended
         March 31, 2002 and 2001                                                                5
     Unaudited Consolidated Statements of Cash Flows--For the Three Months Ended
         March 31, 2002 and 2001                                                                6
     Notes to Unaudited Consolidated Financial Statements                                       7

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of
         Operations                                                                            12

Item 3.  Quantitative and Qualitative Disclosures About Market Risk                            14

                  PART II--OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds                                             14

Item 6.  Exhibits and Reports on Form 8-K                                                      15
</TABLE>

                                       2
<PAGE>

                                 HYDRIL COMPANY

                   Part I, Item 1: Consolidated Balance Sheets

             (In Thousands, Except Share and Per Share Information)

<TABLE>
<CAPTION>
                                                                                March 31,         December 31,
                                                                                  2002                  2001
                                                                           -----------------     -----------------
                                                                              (unaudited)
<S>                                                                        <C>                   <C>
CURRENT ASSETS:
   Cash and cash equivalents                                                   $    78,434             $   89,346
   Receivables:
     Trade, less allowance for doubtful
       accounts: 2002, $1,334; 2001, $1,332                                         40,174                 36,836
     Contract costs and estimated earnings in excess of billings                     1,296                     --
     Other                                                                             403                    642
                                                                               -----------             ----------
           Total receivables                                                        41,873                 37,478
                                                                               -----------             ----------
   Inventories:
     Finished goods                                                                 31,031                 33,057
     Work-in-process                                                                13,027                  9,525
     Raw Materials                                                                   7,737                  6,295
                                                                               -----------             ----------
           Total inventories                                                        51,795                 48,877
                                                                               -----------             ----------
   Deferred tax asset                                                                7,228                  8,566
   Other current assets                                                              2,411                  2,461
                                                                               -----------             ----------
           Total current assets                                                    181,741                186,728
                                                                               -----------             ----------

PROPERTY:
   Land and improvements                                                            18,800                 18,344
   Buildings and equipment                                                          42,258                 41,854
   Machinery and equipment                                                         140,744                138,064
   Construction-in-progress                                                         19,022                 17,753
                                                                               -----------             ----------
           Total                                                                   220,824                216,015
Less accumulated depreciation and amortization                                    (118,275)              (115,977)
                                                                               -----------             ----------
           Property, net                                                           102,549                100,038
                                                                               -----------             ----------
OTHER LONG-TERM ASSETS:
   Deferred tax asset                                                                1,139                  1,091
   Other assets                                                                      4,549                  4,314
                                                                               -----------             ----------
           TOTAL                                                               $   289,978             $  292,171
                                                                               ===========             ==========
</TABLE>


            See notes to unaudited consolidated financial statements

                                       3
<PAGE>

                                 HYDRIL COMPANY

                   Part I, Item 1: Consolidated Balance Sheets

             (In Thousands, Except Share and Per Share Information)

<TABLE>
<CAPTION>
                                                                                March 31,           December, 31,
                                                                                  2002                  2001
                                                                           -----------------     -----------------
                                                                              (unaudited)

<S>                                                                            <C>                      <C>
CURRENT LIABILITIES:
   Accounts payable                                                            $ 19,633                 $ 23,358
   Billings in excess of contract costs and estimated earnings                    9,943                   12,641
   Accrued liabilities                                                           14,740                   17,266
   Current portion of long-term debt                                                 94                      234
   Current portion of capital leases                                                 --                       52
   Income taxes payable                                                           2,674                    2,449
                                                                               --------                 --------
           Total current liabilities                                             47,084                   56,000
                                                                               --------                 --------

LONG-TERM LIABILITIES:
   Long-term debt, excluding current portion                                     60,000                   60,000
   Deferred tax liability                                                           416                      411
   Other                                                                         16,267                   15,575
                                                                               --------                 --------
           Total long-term liabilities                                           76,683                   75,986
                                                                               --------                 --------

CONTINGENCIES (Note 3)

STOCKHOLDERS' EQUITY:
   Capital stock:
     Preferred Stock-authorized, 10,000,000 shares of $1 par
       value; none issued or outstanding
     Common stock-authorized 75,000,000 shares of $.50 par value;
       14,411,834 and 14,359,596 shares issued and outstanding at
       March 31, 2002 and December 31, 2001,
       respectively                                                               7,206                    7,180
     Class B common stock-authorized, 32,000,000 shares of
       $.50 par value; 7,951,379 and 7,966,404 shares issued and
       outstanding at March 31, 2002 and December 31, 2001,
       respectively                                                               3,976                    3,983
   Additional paid in capital                                                    41,441                   41,033
   Retained earnings                                                            113,588                  107,989
                                                                               --------                 --------
           Total stockholders' equity                                           166,211                  160,185
                                                                               --------                 --------
              TOTAL                                                            $289,978                 $292,171
                                                                               ========                 ========
</TABLE>


            See notes to unaudited consolidated financial statements

                                       4
<PAGE>

                                 HYDRIL COMPANY

         Part I, Item 1: Unaudited Consolidated Statements of Operations

               (In Thousands, Except Share and Per Share Amounts)

<TABLE>
<CAPTION>
                                                     Three Months Ended
                                                          March 31,
                                              -----------------------------
                                                  2002            2001
                                              ------------    -------------

<S>                                           <C>             <C>
REVENUE                                       $     58,055    $     55,522
COST OF SALES                                       37,325          37,618
                                              ------------    ------------
GROSS PROFIT                                        20,730          17,904
                                              ------------    ------------
SELLING, GENERAL &
  ADMINISTRATION EXPENSES:
  Engineering                                        3,074           2,484
  Sales and marketing                                3,827           3,636
  General and administration                         4,299           3,527
                                              ------------    ------------
         Total                                      11,200           9,647
                                              ------------    ------------
OPERATING INCOME                                     9,530           8,257

INTEREST EXPENSE                                    (1,127)         (1,094)
INTEREST INCOME                                        388           1,035
OTHER INCOME (EXPENSE)                                (110)           (101)
                                              ------------    ------------
INCOME BEFORE INCOME TAXES                           8,681           8,097
PROVISION FOR INCOME TAXES                           3,082           2,915
                                              ------------    ------------
NET INCOME                                    $      5,599    $      5,182
                                              ============    ============
NET INCOME PER SHARE:
  BASIC                                       $       0.25    $       0.23
                                              ============    ============
  DILUTED                                     $       0.25    $       0.23
                                              ============    ============

WEIGHTED AVERAGE SHARES OUTSTANDING:
  BASIC                                         22,345,032      22,053,462
  DILUTED                                       22,735,528      22,531,995
</TABLE>


            See notes to unaudited consolidated financial statements

                                       5
<PAGE>

                                 HYDRIL COMPANY

         Part I, Item 1: Unaudited Consolidated Statements of Cash Flows

                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                                         Three Months Ended
                                                                                              March 31,
                                                                                     --------------------------
                                                                                       2002               2001
                                                                                     -------             ------

<S>                                                                                  <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                                         $  5,599            $ 5,182
                                                                                     --------            -------
  Adjustments to reconcile net income to net cash used in
    operating activities:
    Depreciation                                                                        2,521              2,167
    Deferred income taxes                                                               1,787              1,619
    Provision for doubtful accounts                                                       (30)               (43)
    Change in operating assets and liabilities:
       Receivables                                                                     (3,069)            (4,112)
       Contract costs and estimated earnings in excess of billings                     (1,296)               545
       Inventories                                                                     (2,918)            (2,422)
       Other current and noncurrent assets                                               (317)               552
       Accounts payable                                                                (3,725)             1,810
       Billings in excess of contract costs and estimated earnings                     (2,698)            (4,003)
       Accrued liabilities                                                             (2,526)            (4,192)
       Income taxes payable                                                               225                170
       Other long-term liabilities                                                        692                 25
                                                                                     --------            -------
          Net cash used in operating activities                                        (5,755)            (2,702)
                                                                                     --------            -------
NET CASH FROM INVESTING ACTIVITIES:
  Capital expenditures                                                                 (5,236)            (5,817)
                                                                                     --------            -------
          Net cash used in investing activities                                        (5,236)            (5,817)
                                                                                     --------            -------
NET CASH FROM FINANCING ACTIVITIES:
  Repayment of debt                                                                      (140)              (129)
  Repayment of capital leases                                                             (52)               (66)
  Net proceeds from issuance of common stock                                               96                 --
  Net proceeds from exercise of stock options                                             175                514
                                                                                     --------            -------
          Net cash provided by financing activities                                        79                319
                                                                                     --------            -------
NET DECREASE IN CASH AND CASH EQUIVALENTS                                             (10,912)            (8,200)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                       89,346             73,279
                                                                                     --------            -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                           $ 78,434            $65,079
                                                                                     --------            -------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Interest paid                                                                      $  1,080            $ 1,043
  Income taxes paid:
      Domestic                                                                             43                 --
      Foreign                                                                           1,395                733
</TABLE>


            See notes to unaudited consolidated financial statements

                                       6
<PAGE>

                                 Hydril Company

      Part I, Item 1: Notes to Unaudited Consolidated Financial Statements

Note 1 -- BASIS OF PRESENTATION

     Principles of Consolidation- The consolidated financial statements include
the accounts of Hydril Company and its wholly owned subsidiaries. Intercompany
accounts and transactions are eliminated in consolidation.

     Use of Estimates- The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent assets and
liabilities as of the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could differ
from those estimates.

     Reclassifications- Certain prior year amounts within the consolidated
financial statements have been reclassified to conform to the current year's
presentation.

     Interim Presentation- The accompanying consolidated interim financial
statements and disclosures have been prepared by the Company in accordance with
accounting principles generally accepted in the United States of America and in
the opinion of management reflect all adjustments (consisting solely of normal
recurring adjustments) necessary for a fair presentation in all material
respects of the financial position and results for the interim periods. These
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 2001. The results of operations for the
three months ended March 31, 2002 are not necessarily indicative of results to
be expected for the full year.

Note 2 -- LONG-TERM CONTRACTS

     The components of long-term contracts as of March 31, 2002 and December 31,
2001 consist of the following:

<TABLE>
<CAPTION>
                                                             March 31, 2002       December 31, 2001
                                                             --------------       -----------------
                                                                        (in thousands)
<S>                                                              <C>                       <C>
Costs and estimated earnings on uncompleted
  contracts                                                     $ 19,627                  $  8,993
Less:  billings to date                                          (28,274)                  (21,634)
                                                                --------                  --------
Excess of costs and estimated earnings over billings            $ (8,647)                 $(12,641)
                                                                ========                  ========
Included in the accompanying balance sheets under
  the following captions:
Contract costs and estimated earnings in excess
  of billings                                                   $  1,296                  $   -
Billings in excess of contract costs and
  estimated earnings                                              (9,943)                  (12,641)
                                                                --------                  --------
         Total                                                  $ (8,647)                 $(12,641)
                                                                ========                  ========
</TABLE>

                                       7
<PAGE>

Note 3 -- CONTINGENCIES

     The Company is involved in legal proceedings arising in the ordinary course
of business. In the opinion of management these matters are such that their
outcome will not have a material adverse effect on the financial position or
results of operations of the Company.

     The Company has been identified as one of many potentially responsible
parties at a waste disposal site in California. The Company's agreed upon share
of total site cleanup costs is approximately $303,000, which is expected to be
disbursed during 2002. This obligation has been adequately reserved for in the
financial statements and will not materially affect the Company's results of
operations or financial condition.

     The Company has also been identified as a potentially responsible party at
a waste disposal site near Houston, Texas. Based on the number of other
potentially responsible parties, the total estimated site cleanup costs and its
estimated share of such costs, the Company does not expect this matter to
materially affect its results of operation or financial condition.

Note 4 --LONG TERM DEBT

     The Company's borrowings as of March 31, 2001 and December 31, 2001 were as
follows:

                                      March 31, 2002       December 31, 2001
                                      --------------       -----------------
                                                 (in thousands)
 Senior notes                             $60,000                 $60,000
 Revolving lines of credit                     --                      --
 IBM note financing                            94                     234
                                        ---------               ---------
         Total                             60,094                  60,234
 Less current portion                         (94)                   (234)
                                        ---------               ---------
         Total long-term debt             $60,000                 $60,000
                                          =======                 =======


     The $60,000,000 senior unsecured notes bear interest at a rate of 6.85% per
annum, which is payable quarterly. The senior notes mature June 30, 2003 and may
not be prepaid prior to this date unless the Company pays the noteholders a
make-whole premium based on prevailing market interest rates. The long-term note
agreement for these notes has one financial event of default covenant, a minimum
tangible net worth test, which the Company was in compliance with at March 31,
2002. Additional financial tests under the long-term note agreement, if not
passed, restrict the Company's ability to incur additional indebtedness or make
acquisitions, investments and restricted payments, such as pay dividends and
repurchase capital stock. At March 31, 2002, the Company satisfied these
financial incurrence tests.

     The Company has available an unsecured U.S. revolving line of credit of
$25,000,000. The credit line will mature March 31, 2003. The Company may, at its
election, borrow at either a prime or LIBOR based interest rate. Interest rates
under the line fluctuate depending on the Company's leverage ratio and are LIBOR
plus a spread ranging from 125 to 200 basis points or prime. At March 31, 2002,
there were no outstanding borrowings under this credit facility. There are
covenants under this line which require the Company to maintain certain
financial ratios. The Company was in compliance with these covenants at March
31, 2002.

     Additionally, the Company has two foreign unsecured lines of credit, one
committed and one uncommitted, for a total of $14,000,000. The committed line
for $10,000,000 matures March 31, 2003. The Company may, at its election, borrow
at either a prime or LIBOR based interest rate. Interest rates under the credit
line fluctuate depending on the Company's leverage ratio and are prime plus a
spread ranging from zero to 25 basis points or LIBOR plus a spread ranging from
125 to 225 basis points. At March 31, 2002, there were no outstanding borrowings
under this facility.

     The uncommitted line can be terminated at the bank's discretion and the
interest rate is a fixed rate based on current Eurodollar market conditions at
the time of the draw. There were no borrowings under this line as of March 31,
2002.

                                       8
<PAGE>

Note 5 -- STOCKHOLDER'S EQUITY

     Subsequent to the end of the quarter, the Company's Board of Directors
approved and the Company entered into a Rights Agreement. Under the terms of the
Rights Agreement, the Company declared a dividend of one Right for each
outstanding share of the Company's common stock and class B common stock to
holders of record as of April 12, 2002.

     The Rights will trade with the Company's common stock and class B common
stock until exercisable. The Rights would be "triggered" and exercisable ten
days following a public announcement that a person or group has acquired 15% of
the Company's common stock or voting rights or ten business days after a person
or group begins a tender offer that would result in ownership of 15% of the
Company's common stock or voting rights. Once triggered, the Rights would
entitle the holders to purchase from the Company a unit consisting of one
one-hundredth of a share of Series A Junior Participating Preferred Stock at a
purchase price of $100 per share or, upon the occurrence of certain events,
either the Company's common stock or shares of common stock of an acquiring
entity for a payment equal to half of market value.

     The Rights may be redeemed by the Company for $.01 per Right at any time
until an acquirer has acquired the level of ownership that "triggers" the Rights
Plan. The Rights extend for ten years and will expire on April 9, 2012.

Note 6 -- EARNINGS PER SHARE

     The Company has presented basic and diluted income (loss) per share ("EPS")
on the consolidated statement of operations. Basic EPS excludes dilution and is
computed by dividing income (loss) available to common stockholders by the
weighted average number of common shares outstanding for the period. Dilutive
EPS is based on the weighted average number of shares outstanding during each
period and the assumed exercise of dilutive stock options less the number of
treasury shares from the proceeds using the average market price for the
Company's common stock for each of the periods presented. When potentially
dilutive securities are anti-dilutive, they are not included in dilutive EPS.
Basic weighted average shares outstanding for the three months ended March 31,
2002 and 2001 were 22,345,032 and 22,053,462, respectively. Dilutive weighted
average shares outstanding for the three months ended March 31, 2002 and 2001
were 22,735,528 and 22,531,995, respectively.

Note 7 -- SEGMENT AND RELATED INFORMATION

     In accordance with SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information", the Company has identified the following
reportable segments: Premium Connection and Pressure Control.

     The Company's premium connection segment manufactures premium connections
that are used in harsh drilling environments. Hydril applies premium threaded
connections to tubulars owned by its customers and purchases pipe in certain
international markets for threading and resale. Hydril manufactures premium
threaded connections and provides services at facilities located in Houston,
Texas; Westwego, Louisiana; Bakersfield, California; Nisku, Alberta, Canada;
Aberdeen, Scotland; Veracruz, Mexico; Batam, Indonesia; Port Harcourt and Warri,
Nigeria.

     The Company's pressure control segment manufactures a broad range of
pressure control equipment used in oil and gas drilling and well completion
typically employed in harsh environments. The Company's pressure control
products are primarily safety devices that control and contain fluid and gas
pressure during drilling, completion and maintenance in oil and gas wells. The
Company also provides replacement parts, repair and field services for its
installed base of pressure control equipment. Hydril manufactures pressure
control products at two plant locations in Houston, Texas.

     The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. The Company evaluates
performance based on operating income or loss.

                                       9
<PAGE>

     Financial data for the business segments for the three months ended
March 31, 2001 and 2000 is as follows:

                                              Three Months Ended
                                                   March 31,
                                       -------------------------------
                                          2002                 2001
                                       ---------             ---------
                                                (in thousands)
Revenue
  Premium Connection                   $ 29,313              $ 30,372
  Pressure Control                       28,742                25,150
                                         ------                ------
           Total                       $ 58,055              $ 55,522
                                         ======                ======
Operating income (loss)
  Premium Connection                   $  7,249              $  5,662
  Pressure Control                        5,411                 4,955
  Corporate Administration               (3,130)               (2,360)
                                       --------              --------
           Total                       $  9,530              $  8,257
                                        =======               =======
Depreciation expense
  Premium Connection                   $  1,576              $  1,338
  Pressure Control                          525                   414
  Corporate Administration                  420                   415
                                       --------              --------
           Total                       $  2,521              $  2,167
                                        =======               =======
Capital expenditures
  Premium Connection                   $  2,806              $  4,321
  Pressure Control                        2,388                 1,136
  Corporate Administration                   42                   360
                                       --------              --------
           Total                       $  5,236              $  5,817
                                        =======               =======


Note 8 -- RECENT ACCOUNTING PRONOUNCEMENTS

     In July 2001, the FASB issued two new pronouncements: SFAS No. 141,
"Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS 141 prohibits the use of the pooling-of-interest method for
business combinations initiated after June 30, 2001 and also applies to all
business combinations accounted for by the purchase method that are completed
after June 30, 2001. SFAS 142, effective for fiscal years beginning after
December 15, 2001, addresses financial accounting and reporting for acquired
goodwill and other intangible assets and supercedes APB Opinion No. 17,
Intangible Assets. It addresses how intangible assets that are acquired
individually or with a group of other assets (but not those acquired in a
business combination) should be accounted for in financial statements upon their
acquisition. This statement also addresses how goodwill and other intangible
assets should be accounted for after they have been initially recognized in the
financial statements. The Company adopted SFAS 141 and 142 effective January 1,
2002, which had no material impact on our results of operations or financial
condition.

     In August and October 2001, the FASB issued SFAS No. 143, "Accounting for
Asset Retirement Obligations" and SFAS No. 144, "Accounting for Impairment or
Disposal of Long-Lived Assets". SFAS 143 requires entities to record the fair
value of a liability for an asset retirement obligation in the period in which
it is incurred and a corresponding increase in the carrying amount of the
related long-lived asset. Subsequently, the asset retirement costs should be
allocated to expense using a systematic and rational method. SFAS 143 is
effective for fiscal years beginning after June 15, 2002. The Company has
evaluated the provisions of SFAS 143 and expects no impact on its financial
statements from the adoption of this standard. SFAS 144 addresses financial
accounting and reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of. It supersedes, with exceptions, SFAS 121,
"Accounting for the Impairment of Long-Lived assets and Long-Lived Assets to be
Disposed of", and is effective for fiscal years beginning after December 15,
2001.

                                       10
<PAGE>

The Company adopted SFAS 144 effective January 1, 2002, which had no material
impact on our results of operations or financial condition.

                                       11
<PAGE>

Part I, Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations


     This quarterly report on Form 10-Q contains forward-looking statements.
These statements relate to future events or our future financial performance,
including our business strategy and product development plans, and involve known
and unknown risks and uncertainties. These risks and uncertainties and
assumptions, which are more fully described in Hydril Company's Annual Report on
Form 10-K for the year ended December 31, 2001 filed with the Securities and
Exchange Commission, include the impact of oil and natural gas prices and
worldwide economic conditions on drilling activity and the demand for and
pricing of Hydril's products and Hydril's assumptions relating thereto. These
factors may cause our company's or our industry's actual results, levels of
activity, performance or achievements to be materially different from those
expressed or implied by the forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "could," "expects," "intends," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "continue," or the negative of these terms
or other comparable terminology.

                                    OVERVIEW

     Hydril Company is engaged worldwide in engineering, manufacturing and
marketing premium connections and pressure control products used for oil and gas
drilling and production. Our premium connections are used in drilling
environments where extreme pressure, temperature, corrosion and mechanical
stress are encountered, as well as in environmentally sensitive drilling. These
harsh drilling conditions are typical for deepwater, deep-formation and
horizontal wells. Our pressure control products are primarily safety devices
that control and contain fluid and gas pressure during drilling, completion and
maintenance of oil and gas wells in the same environments. We also provide
aftermarket replacement parts, repair and field services for our installed base
of pressure control equipment. These products and services are required on a
recurring basis because of the impact of the extreme conditions in which
pressure control products are used.

     Demand for our products and services is cyclical and substantially
dependent on the activity levels in the oil and gas industry and its willingness
to spend capital on the exploration and development of oil and gas reserves. The
level of these capital expenditures is highly sensitive to current and expected
oil and gas prices. Our premium connections are marketed primarily to oil and
gas operators. Sales of premium connection products are driven by the level of
worldwide drilling activity, in particular the number of rigs drilling to depths
in excess of 15,000 feet and the number of rigs drilling in water depths greater
than 1,500 feet. We sell our pressure control products primarily to drilling
contractors. The main factors that affect sales of pressure control capital
equipment products are the level of construction of new drilling rigs and the
rate at which existing rigs are refurbished. Demand for our pressure control
aftermarket replacement parts, repair and field services primarily depends upon
the level of worldwide offshore drilling activity.

    RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001

Revenue

     Total revenue increased $2.5 million, or 5%, to $58.0 million for the three
months ended March 31, 2002 compared to $55.5 million for the three months ended
March 31, 2001. Our premium connection revenue decreased $1.1 million, or 4%, to
$29.3 million for the three months ended March 31, 2002 as compared to $30.4
million for the prior year period. This slight decline in premium connection
revenue is attributable to reduced demand for our products due to lower rig
counts in North America and partially offset by higher revenue outside of North
America resulting from increased demand from the markets we serve. Pressure
control revenue increased $3.6 million, or 14%, to $28.7 million for the three
months ended March 31, 2002 compared to $25.1 million for the same period in
2001. Capital equipment revenue increased 49%due to the progress made on capital
equipment project orders received during 2001, while aftermarket revenue
decreased 12% due to lower demand as a result of the decline in the worldwide
offshore rig count.

                                       12
<PAGE>

Gross Profit

     Gross profit increased $2.8 million to $20.7 million for the three months
ended March 31, 2002 from $17.9 million for the three months ended March 31,
2001. The increase was primarily due to increased efficiency at our premium
connection plants, increased profitability on our capital equipment projects,
and the cumulative effect of price increases initiated during 2001 in both of
our segments.

Selling, General and Administrative Expenses

     Selling, general, and administrative expenses for the first quarter of 2002
were $11.2 million compared to $9.6 million for the prior year period. The
increase was due to higher engineering expenses to support the increase in
pressure control capital equipment projects, and higher administrative expenses
which included, increased insurance costs, higher public company related
expenses, and commercialization of our subsea mudlift drilling technology. As a
percentage of sales, selling, general, and administrative expenses were 19% for
the first quarter of 2002 compared to 17% for the first quarter of 2001.

Operating Income

     Operating income increased $1.3 million to $9.5 million for the three
months ended March 31, 2002 compared to $8.2 million for the same period in
2001. Operating income for our premium connection segment increased $1.5 million
to $7.2 million for the first quarter of 2002 from $5.7 million for the first
quarter of 2001. Operating income for our pressure control segment increased
$0.5 million to $5.4 million for the quarter ended March 31, 2002 compared to
the same period in 2001. Corporate and administrative expenses increased $0.7
million to $3.1 million for the three months ended March 31, 2002 compared to
$2.4 million for the prior year period.

                         LIQUIDITY AND CAPITAL RESOURCES

     Our primary liquidity needs are to fund capital expenditures, such as
expanding and upgrading manufacturing facilities and capacity, to fund new
product development and to provide additional working capital. Our primary
sources of funds have been from our initial public offering completed in October
2000 from which we received net proceeds of $39.6 million, cash flow from
operations, reimbursement of costs related to the joint industry project to
develop a subsea mudlift drilling system in which we participated and proceeds
from borrowings under our bank facilities. The reimbursements related to the
joint industry project were completed in January 2002.

Operating Activities

     For the three months ended March 31, 2002, cash used in operating
activities was $5.8 million compared to $2.7 million for the three months ended
March 31, 2001. This increase in cash used in operations in the first quarter of
2002 as compared to the first quarter of 2001 was the result of increased
working capital requirements to support the manufacture of pressure control
capital equipment projects and to support increased product demand in our
premium connection international markets.

Investing Activities

     Net cash used in investing activities was $5.2 million for the three months
ended March 31, 2002 and $5.8 million for the three months ended March 31, 2001.
The investment of cash in both of these periods is attributable to capital
spending. Capital spending for the first quarter of 2002 included $2.8 million
in our premium connection segment related to plant capacity expansion and $2.4
million in our pressure control segment to replace and refurbish machine tools
as well as to construct a new deepwater assembly building for blowout preventer
stack assembly at our Houston plant. Capital spending during the first quarter
of 2001 included $4.3 million in our premium connection segment primarily
related to capacity expansion in North America, $1.1 million in our pressure
control segment to upgrade the equipment in our Houston plant, and $0.4 million
for general corporate purposes.

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Credit Facilities

     We have a domestic unsecured revolving line of credit for working capital
requirements that provides up to $25.0 million in committed revolving credit
borrowings through March 31, 2003. We may borrow, at our election, at either a
prime or LIBOR based interest rate. Interest rates under the facility fluctuate
depending on our leverage ratio and are LIBOR plus a spread ranging from 125 to
200 basis points or prime. At March 31, 2002, there were no outstanding
borrowings under this facility. Our revolving credit agreement contains
covenants with respect to debt levels, tangible net worth,
debt-to-capitalization and interest coverage ratios. At March 31, 2002, we were
in compliance with these covenants.

     Additionally, Hydril has a committed unsecured foreign line of credit for
$10.0 million and an uncommitted foreign line of credit for $4.0 million. We
may, at our election, borrow under it at either a prime or LIBOR based interest
rate. Interest rates under the committed credit line fluctuate depending on the
Company's leverage ratio and are prime plus a spread ranging from zero to 25
basis points or LIBOR plus a spread ranging from 125 to 225 basis points. At
March 31, 2002, there were no outstanding borrowings under this facility.

     The uncommitted line can be terminated at the bank's discretion and the
interest rate is a fixed rate based on current Eurodollar market conditions at
the time of the draw. There were no borrowings under this line as of March 31,
2002.

Backlog

     The pressure control capital equipment backlog was $54.3 million at
March 31, 2002, $55.8 million at December 31, 2001 and $49.0 million at
March 31, 2001. We include in this backlog orders for pressure control capital
equipment and long-term projects. It is possible for orders to be cancelled,
however, in the event of cancellations all costs incurred would be billable to
the customer. We recognize the revenue and gross profit from pressure control
long-term projects using the percentage-of-completion accounting method. The
remaining revenue from projects currently in backlog is expected to be recorded
during the remainder of 2002 and 2003. As revenue is recognized under the
percentage-of-completion method, the order value in backlog is reduced. Our
backlog of premium connection and pressure control aftermarket parts and service
are not a meaningful measure of business prospects due to the quick turnover of
such orders.

Part I, Item 3: Quantitative and Qualitative Disclosures About Market Risk

     There have been no significant changes since December 31, 2001 in the
Company's exposure to market risk.

Part II, Item 2: Changes in Securities and Use of Proceeds

     In October 2000, we completed an initial public offering of 8,600,000
shares of common stock, which were sold at $17.00 per share. Of the 8,600,000
shares, 2,672,668 shares were sold by Hydril and 5,927,332 shares were sold by
existing stockholders. The net proceeds to Hydril from the offering, after
deducting expenses, were $39.6 million. None of Hydril's proceeds from the
offering have been or will be paid to directors, officers, affiliates of Hydril,
or persons owning 10% or more of any class of Hydril's common stock.

     Since completing the offering, we have used $17.9 million of the proceeds
to expand manufacturing capacity at our premium connection facilities, $9.0
million to upgrade machinery and equipment in our Houston pressure control
plants and $3.1 million for the expansion of our advanced composite tubing
production, and the development and commercialization of our subsea mudlift
drilling technology. The balance of the proceeds to Hydril ($9.6 million at
March 31, 2002) is invested in various high-grade securities and money market
accounts and will be used to complete approved capital expenditures that are
currently in progress to expand our manufacturing capacity to produce premium
connections, upgrade machine tools that we use in the manufacturing of our
pressure control products and commercialize our subsea mudlift drilling
technology.

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Part II, Item 6: Exhibits and Reports on Form 8-K

Exhibits:

     None.

Reports on Form 8-K:

     On February 6, 2002, we filed a Form 8-K which disclosed financial
information to be presented by officers of Hydril Company to analysts,
investment banking firms and prospective investors beginning on February 6,
2002.

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                                    SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                     HYDRIL COMPANY


 Date:  May 13, 2002                 By: /s/  Michael C. Kearney
                                        -------------------------------------
                                        Michael C. Kearney
                                        Chief Financial Officer and
                                        Vice President-Administration
                                        (Authorized officer and principal
                                        accounting and financial officer)

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