Varco Earnings Dip; Drilling Decrease Cited

Citing decreased drilling activity in the United States and abroad, Varco International Inc., a manufacturer of oil- and gas-drilling equipment, reported a marked decline in quarterly earnings and sales.

Varco showed a second-quarter profit of $246,000, or 1 cent a share, compared to $3.4 million, or 12 cents a share, for the corresponding period of 1991. Revenue dropped to $37.4 million from $56 million, with sales falling in each of Varco’s three divisions: Drilling Systems, Varco BJ Oil Tools and Martin-Decker/TOTCO Instrumentation.

For the six months ended June 30, profit was $2.7 million, or 8 cents a share, compared to $6.6 million, or 23 cents a share, for the first half of 1991. Six-month sales were $84.8 million, down from $102.4 million a year earlier.

“The extremely depressed level of drilling activity in the United States, particularly in the Gulf of Mexico, together with reduced activity in certain key international markets, is the principal reason for our reduced revenues and profits,” George Boyadjieff, the company’s president and chief executive officer, said in a statement.

Varco’s stock closed at $4.63 a share, down 12 cents, in Thursday’s trading on the New York Stock Exchange.