<PAGE>

                                 UNITED STATES

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q
  (Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934
                 For the quarterly period ended June 30, 1999

                                      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 1-8158


                           VARCO INTERNATIONAL, INC.
            (Exact name of registrant as specified in its charter)

           California                                    95-0472620
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                  743 North Eckhoff Street, Orange, CA 92868
                   (Address of principal executive offices)
                                  (Zip code)

                                (714) 978-1900
             (Registrant's telephone number, including area code)

                                Not Applicable
  (Former name, former address and former fiscal year, if changed since last
                                    report)


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 ___
                                        ---

                                  65,058,673

        (Number of shares of Common Stock outstanding at June 30, 1999)
<PAGE>

                         PART I-FINANCIAL INFORMATION


Item 1.  Financial Statements.

          Pursuant to General Instruction D to Form 10-Q, the Condensed
Consolidated Statements of Cash Flows, Condensed Consolidated Balance Sheets and
Condensed Consolidated Statements of Income of Varco International, Inc., (the
"Company") and its subsidiaries included in the registrant's Second Quarter
Report to Shareholders for the three months ended June 30, 1999, filed as
Exhibit 19 hereto are incorporated herein by reference. Such financial
statements should be read in light of the following:

          Adjustments.  The financial statements contained in Exhibit 19 hereto
include all adjustments which in the opinion of management are of a normal
recurring nature, considered necessary to present fairly the results of
operations for the interim periods presented.

          Basic net income per share is based upon an average of  65,044,761 and
64,443,960 shares outstanding for the three months ended June 30, 1999, and
1998, respectively. Diluted net income per share is based upon an average of
65,897,179 and 65,884,697 shares outstanding for the three months ended June 30,
1999, and 1998, respectively.

          Basic net income per share is based upon an average of  64,891,136 and
64,342,409 shares outstanding for the six months ended June 30, 1999, and 1998,
respectively. Diluted net income per share is based upon an average of
65,743,554 and 65,783,146 shares outstanding for the six months ended June 30,
1999, and 1998, respectively.

          Inventories.  The Company estimates the components of inventory at
June 30, 1999, and December 31, 1998, to be as follows:

<TABLE>
<CAPTION>
                            June 30, 1999        December 31, 1998
                            -------------        -----------------
     <S>                    <C>                  <C>
     Raw Materials          $  5,059,000           $  5,806,000
     Work in Process          36,932,000             50,684,000
     Finished Goods           90,869,000            109,581,000
     LIFO Reserves           (12,677,000)           (13,659,000)
                            ------------           ------------
                            $120,183,000           $152,412,000
                            ============           ============
</TABLE>

          Fixed Assets.  Fixed assets are stated net of accumulated depreciation
of $74,706,000 at June 30, 1999, and $71,263,000 at December 31, 1998.

          Common Stock and Additional Paid-In-Capital. On June 30, 1999, the
Company Common Stock account was $55,427,000 and Additional Paid-In-Capital
accounts were $104,361,000.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations.
<PAGE>

          Pursuant to General Instruction D to Form 10-Q, Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the registrant's Second Quarter Report to Shareholders for the
three months ended June 30, 1999, filed as Exhibit 19 hereto, is incorporated
herein by reference.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

          The Company is exposed to certain market risks which are inherent in
the Company's financial instruments and which arise from transactions entered
into in the normal course of business. The Company does not considered these
risks significant, and the Company does not enter into derivative financial
instrument transactions to offset these risks.

  Borrowings under the Company's revolving credit facility do not give rise to
significant interest rate risks because these borrowings have a variable
interest rate. The Company has no fixed interest rate debt at June 30, 1999.
Generally, the fair market value of debt with a fixed interest rate will
increase as interest rates fall, and the fair market value will decrease as
interest rates rise. Fixed interest rate borrowings have not been significant
during the three Months ended June 30, 1999.

                           PART II-OTHER INFORMATION

Item 2.   Changes in Securities

  On June 27, 1997 the Company entered into a seven-year unsecured revolving
credit agreement with three banks (the "Credit Agreement"). The Credit Agreement
provides for a credit facility of $65.0 million, inclusive of a $20.0 million
letter of credit sub-facility. The maximum available under the Credit Agreement
is reduced in equal quarterly amounts over the last four years of the Credit
Agreement.

  The Credit Agreement prohibits any "Restricted Junior Payment" unless (1) at
the time thereof no default exists under the Credit Agreement or will be caused
thereby and (2) the cumulative amount of all Restricted Junior Payments
subsequent to June 27, 1997, would not exceed the sum of $5,000,000 plus 25% of
the Company's consolidated net income arising after June 30, 1997. "Restricted
Junior Payment" is generally defined as (1) any dividend or other distribution
on any class of the Company's capital stock, except a dividend payable solely in
shares of that class; (2) any redemption, purchase or other acquisition for
value of any shares of any class of the capital stock of the Company; (3) any
payment made to retire or obtain the surrender of any outstanding warrants,
options or similar rights to acquire any shares of any class of the capital
stock of the Company; and (4) any payment on the Senior Notes other than
regularly scheduled payments of principal and interest thereon.

Item 4.  Submission of Matters to a Vote of Security Holders

               (a) The annual meeting of Shareholders of the Company was held
on May 13, 1999.

               (c) Matters voted upon at the 1999 Annual Meeting of
Shareholders of the Company.

               1.   Election of Directors

<TABLE>
<CAPTION>
         Name                        Votes For   Votes Withheld
         <S>                        <C>          <C>
         G. Boyadjieff              57,405,787      111,469
         G. Dotson                  57,409,574      107,682
         A. Horn                    47,906,607    9,610,649
         J. Knowlton                57,393,260      123,996
         L. Pircher                 56,560,434      956,822
         W. Reinhold                57,396,677      120,579
         C. Suggs                   57,405,822      111,434
</TABLE>
<PAGE>

<TABLE>
           <S>                        <C>             <C>
           R. Teitsworth              57,406,098      111,158
           E. White                   57,401,637      115,619
           J. Woods                   57,402,207      115,049
</TABLE>


               2.   Proposal to ratify Ernst & Young LLP as the independent
           auditors of the Company.

           Votes For                  Votes Against             Abstentions

           57,465,475                     24,525                   27,256


Item 6.    Exhibits and Reports on Form 8-K


     (a)   Exhibits

     10.1  Amendments to the Varco International, Inc. 1990 Stock Option Plan.

     10.2  Form of amendment to stock option agreements.

      11   Statement re computation of per share earnings for the three months
 and six months ended June 30, 1999 and 1998.

     19    Varco International, Inc. Second Quarter Report to Shareholders,
 Three Months Ended June 30, 1999.

     27    Financial Data Schedule

     (b)   Reports on Form 8-K.

           No reports on Form 8-K were filed during the quarter for which this
 report is filed.
<PAGE>

                                  SIGNATURES


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.



                                        VARCO INTERNATIONAL, INC.



Date: August 10, 1999                   By:/s/Richard A. Kertson
                                        Vice President-Finance
                                        and Chief Financial Officer


Date: August 10, 1999                   By:/s/Donald L. Stichler
                                        Vice President,
                                        Controller-Treasurer
                                        and Secretary
<PAGE>


                                 EXHIBIT INDEX



10.1  Amendments to the Varco International, Inc. 1990 Stock Option Plan.

10.2  Form of amendment to stock option agreements.

11    Statement re computation of per share earnings for the three months and
      six months ended June 30, 1999 and 1998.

19    Varco International, Inc. Second Quarter Report to Shareholders, Three
      Months Ended June 30, 1999.

27    Financial Data Schedule