Varco Reports $68,000 Profit in 1st Quarter
A rigorous belt-tightening campaign and a backlog of orders from last year has enabled Varco International to post net income of $68,000 for the first quarter of 1986 despite a continuing depression in the oil business.
But officials of the Orange-based oil services company said they don’t expect the profits to last.
Varco chief financial officer Richard A. Kerston said the company probably will slide into the red in the second quarter because of the severe decline in worldwide oil-drilling activity that began in January.
He said the small first-quarter profit for the company, which reported a loss of $1.7 million for the same period last year, came primarily from a paring down of operating costs. The company reduced its worldwide work force to 338 employees from 390, slashed manufacturing space by 60% at its Orange facility, and used revenue from the sale of excess company-owned land and buildings to pay down corporate debt and reduce interest costs.
In addition, Kerston said, Varco increased productivity and kept busy filling a backlog of orders received last year. Varco’s revenues increased slightly in the first quarter to $15.1 million from $14.9 million in 1985.