SAN FRANCISCO (Reuters) - Contract oil and gas driller Nabors Industries Ltd. reported yesterday a sharp drop in second-quarter earnings, excluding charges, hit by a industry-wide slump that Nabors said was largely bottoming out.

Before accounting for $240 million in previously announced non-cash charges, Nabors made a profit of $90.9 million, or 32 cents per share, down from $176.4 million, or 60 cents a share, a year before. Revenue dropped 33 percent to $878 million.

Analysts had expected a profit of 28 cents per share on revenue of $945 million, according to the averages on Reuters Estimates.

"Virtually all of our units experienced both sequential and year-over-year declines in quarterly operating income, but we believe most have stabilised with the exception of our US Lower 48 land drilling operations," chief executive Gene Isenberg said in a statement.

Shares of Nabors were broadly unchanged in after-hours trade. The stock is up 43 percent in 2009, compared with a 40 percent rise in the Philadelphia oilfield service index.