VSE Corp. and its subsidiaries reported a 25.6 percent drop in net income for the third quarter, from $868,769 (47 cents a share) in 1984 to $646,228 (35 cents) in 1985. For the nine months ended Sept. 30, VSE reported net income of $1.6 million (86 cents), compared with a loss of $735,682 (39 cents).

Total revenue for the first nine months of this year was $63.7 billion, compared with $56.4 million last year.

The company said 1984 results were restated because of a change in accounting methods at Metropolitan Capital Corp., the company's federally licensed small-business investment company. Before the cumulative effect of the accounting change, the company reported net income of $1.8 million (96 cents) for the first nine months of 1984.

VSE Corp. and its subsidiaries provide engineering, graphic communications, and other services and products to the government, businesses and institutions.

*Net income at PHH Group Inc. grew 7 percent in the second quarter, from $9.9 million (62 cents per share), to $10.5 million (65 cents). For the six months ended Oct. 31, net income totaled $20.9 million ($1.30), compared with $19.3 million ($1.21) for the same period a year ago, a 9 percent increase.

Chairman Jerome W. Geckle said the company has obtained increased business from new and existing clients. PHH and its subsidiary companies provide a broad range of cost-control management services, such as location assistance for corporations.

"Relocation activities have shown a substantial earnings increase, partially due to volume from the relocation acquisition completed at the beginning of the third quarter of last year," said Geckle.