Drilling company Boart Longyear will move its Perth operations overseas to cut costs, and has again reduced its earnings forecast.

Boart Longyear says it will cut annual costs by about $US70 million ($A68.08 million), or 20 per cent of its total overheads, as it deals with lower demand.

The savings would be achieved by relocating its manufacturing operations from Perth to an existing facility in Poland and other locations, Boart Longyear said.

The savings initiatives were expected to cost $US15 million to $US20 million, the company said, but offered no further information on the number of job loses.

Shares in Boart slumped to a three-year low in September and are down 53 per cent so far this year. But the news has given the shares a big boost sending them up 9.3 per cent at $1.415 in recent trade.

Chief executive David McLemore said the company’s earnings forecast had been reduced because margins were not being achieved due to delays in staff reductions.

Hit by a slowdown in the mining industry worldwide, it also warned it expects to take a $50 million charge on inventory and asset values.

The Denver-based, Australian-listed company said it now expects calendar 2012 earnings before interest, tax, depreciation and amortisation to fall to between $310 million and $320 million, from $356 million last year.

It flagged in August it expected earnings to be flat to 10 per cent higher. It still expects revenue to hold around $2 billion.

"Revenues are broadly consistent with expectations, but margins in drilling services have been impacted due to timing of cost take-outs associated with headcount reductions," chairman and acting chief executive David McLemore said in a statement.

Mr McLemore aims to cut more than 20 per cent of the company's overhead costs, or about $70 million.

Boart expects to book a charge of about $50 million on inventory and asset values in light of weaker demand globally for drilling, but said the market appears to have hit bottom.

"Early indications from 2013 contract negotiations currently underway are that market demand has stabilised and revenue run-rate in 2013 should approximate second-half 2012 levels," it said.

AAP, Reuters