Reuters: Hot Stocks: UPDATE 1-Weir pegs year outcome on oil and gas improvement

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UPDATE 1-Weir pegs year outcome on oil and gas improvement Jul 31st 2012, 08:29 Tue Jul 31, 2012 4:29am EDT * H1 profit up 27 percent, meeting expectations * Low end of full-year guidance would miss expectations * Shares down 4.5 pct LONDON, July 31 (Reuters) - Engineer Weir Group PLC said its full-year outcome would depend on the timing of an improvement in the oil and gas pumping market, after it broadly met expectations for the first-half profit on strong trading in its minerals and power and industrials divisions. The British company said profits rose by 27 percent to 226 million pounds ($354.7 million) on revenue of 1.33 billion pounds revenue in the fist six months, despite challenging conditions in the pressure pumping market. It said it expected profits for 2012 to be in the range of 440 million pounds to 460 million pounds. If the company comes in at the lower end of the range, it would fall short of market expectations, as the average analyst forecast stands at 450 million pounds, according to a Thomson Reuters I/B/E/S poll of 17 brokers. Shares in the group were 4.5 percent lower at 1,627 pence by 0825 GMT, the biggest FTSE 100 faller. The company said its minerals division performed strongly with margins and revenues ahead of expectations and growth achieved in all regions. Revenues in its oil and gas division were up 49 percent to 492 million pounds, despite orders being 7 percent lower on challenging conditions in pressure pumping markets. Chief Executive Keith Cochrane said the company was looking to better demand in the pressure pumping aftermarket in the rest of the year. "Where we land in that (guidance) range is largely dependent upon the timing of an expected improvement (in demand)," he said. UBS said the results beat its expectations, but it noted that guidance was revised slightly down. "The low end of Weir's new guidance reflects no recovery from Q2," analyst Stephen Swanton said. The company increased its half-year dividend by 11 percent to 8 pence. Link this Share this Digg this Email Reprints

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