Weir Group shares drop on warning over full-year operating profits

 
Courtney Goldsmith
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An oil pipeline is seen 10 January 2007
Oil and gas growth was strong in the quarter (Source: Getty)

Shares in oilfield services firm Weir Group dropped more than seven per cent today after the company warned its full-year operating profit would be lower than expected.

In a trading statement for the third quarter, Weir said higher costs and investments in its mining business would send its operating profits lower than previously stated.

The company, which makes pipes and valves for energy and mining firms, led the FTSE 250's worst performers for the day. At the time of writing, shares were down 7.16 per cent at 1,946p.

Read more: Weir Group shares jump on an upswing in the North American oil market

Chief executive Jon Stanton added that while the group expects strong growth in full-year revenues and profits on a constant currency basis, minerals profits were expected to be slightly lower than previously expected due to increased investment in growth.

In the third quarter, Weir said orders in its mining unit rose 12 per cent while oil and gas orders jumped 59 per cent. Total orders were up 21 per cent.

"In 2017 we continue to build on our leadership positions in rapidly improving main markets whilst investing to maximise the significant opportunities ahead of us," Stanton said.

"As the North American onshore oil and gas industry continues to demonstrate its increased relevance as a source of global supply, our oil and gas business is fully leveraging its market leadership position in support of higher activity levels among customers. While international markets remained challenging the division has accelerated in 2017 as we expected and is well placed to continue to fully capture future opportunities."

Read more: Weir acquires a leading Asian oilfield services firm for $114m

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