Estimates were $0.13
Varco Announces Third Quarter Results
ORANGE, Calif., Oct. 14 /PRNewswire/ -- Varco International, Inc. (NYSE: VRC - news) today announced results of operations for the third quarter and nine months ended September 30. Net Income for the quarter was $10.3 million, $.16 per share (diluted), on Revenues of $140.4 million. For the same quarter of 1998, Net Income was $15.0 million, $.23 per share (diluted), and Revenues totaled $190.9 million.
For the first nine months of 1999, Net Income was $33.2 million, $.51 per share (diluted), as compared to $49.7 million, $.76 per share (diluted), during the comparable period of 1998. Revenues for the most recent nine months were $448.4 million, versus $538.3 million for the same period a year ago.
Order bookings for the most recent quarter were $81.8 million, before order cancellations of $1.8 million. For the comparable quarter of 1998, incoming orders totaled $146.7 million and order cancellations were $50.5 million, resulting in net orders of $96.2 million. During the second quarter of 1999, orders bookings were $63.2 million, excluding cancellations of $1.1 million.
For the first nine months of this year, order bookings totaled $217.3 million, excluding cancellations of $18.7 million; the comparable figures for the same period of 1998 were $639.7 million and $63.5 million, respectively. Backlog at September 30 was $119.0 million.
Set forth below are Revenues and orders for each of the Company's operating divisions for the quarters ended September 30, 1999 and 1998.
Revenues Orders
1999 1998 1999 1998
(In thousands)
Varco Systems $53,051 $63,013 $31,760 $45,704
Varco BJ 13,244 23,286 8,959 21,200
M/D Totco 19,322 28,336 11,116 23,277
Shaffer 49,184 71,907 27,034 49,880
Rigtech 4,975 4,091 2,937 6,601
Cancellations n/a n/a (1,762) (50,510)
$139,776 $190,633 $80,044 $96,152
The reduced level of incoming orders as compared to last year reflects the continued low level of worldwide drilling activity and the absence of new rig construction. As a result of the relatively large order backlog accumulated during 1997 and the first half of 1998, the decline in Revenues to date in 1999 has been relatively less severe. Most of that backlog consisted of orders for equipment to outfit new offshore rigs, the majority of which have been delivered. With the remainder of such equipment scheduled for delivery in the next few months, it is anticipated that the backlog will decline further, to levels more reflective of current order rates.
In discussing the third quarter results, Varco's Chairman and Chief Executive Officer George Boyadjieff said, ``Although oil prices have recovered dramatically and natural gas prices remain strong, oil company spending for exploration and production has not shown a significant increase and worldwide drilling activity remains very low. As a result, third quarter orders remained quite weak, although somewhat above the first half rate.
``Many analysts are now forecasting a continued strong commodity price environment, leading to increased oil company spending and an improving market for oil service and equipment companies. While our experience makes us wary of any prediction concerning our industry, we believe this to be a reasonably likely forecast. We also believe that our line of advanced drilling equipment and leading market position serve us well in today's difficult market as well as during a market recovery,' Boyadjieff concluded.
QUARTER ENDED SEPTEMBER 30 1999 1998
(In $000's except per share data)
Revenues $140,400 $190,904
Income Before Income Taxes 15,634 22,574
Net Income 10,330 14,964
Basic Income Per Share .16 .23
Shares Used to Calculate
Per Share Amounts 65,091 64,475
Diluted Income Per Share .16 .23
Shares Used to Calculate
Per Share Amounts 66,025 65,484
NINE MONTHS ENDED SEPTEMBER 30 1999 1998
(In $000's except per share data)
Revenues $448,445 $538,306
Income Before Income Taxes 50,345 75,331
Net Income 33,228 49,678
Basic Income Per Share .51 .77
Shares Used to Calculate
Per Share Amounts 64,891 64,387
Diluted Income Per Share .51 .76
Shares Used to Calculate
Per Share Amounts 65,690 65,396
This press release contains forward-looking statements, which involve risks and uncertainties that may impact the Company's results of operations. These statements include, among others, statements concerning the Company's general business strategies, customer orders and cancellations, backlog and industry trends. See ``Cautionary Statement Pursuant to Private Securities Litigation Reform Act of 1995' included in Varco's 1998 Annual Report to Shareholders for a description of certain of these risks and uncertainties.
Varco International, Inc. is a leader in the design and manufacture of drilling equipment and machinery and rig instrumentation for oil and gas well drilling worldwide.
SOURCE: Varco International, Inc. |
