Norway's TGS Cuts Revenue Guidance, Shares Tumble
OSLO, Oct 8 (Reuters) - Seismic surveyor TGS lowered its full-year revenue guidance for the second time in three months in another sign that a decade-long boom in capital spending by oil firms may be over.
TGS's stock fell 8.5 percent in early trade, hitting its lowest level since July 2012. Shares in rival PGS fell 3.7 percent.
The firm, which maps the seabed for energy firms looking for oil and gas offshore, said net revenues for the year were seen at between $810 million and $870 million, below earlier forecasts for $920 million-$1 billion as oil firms delay projects.
"We continue to experience delays as we wait for permits to acquire new surveys," TGS Chief Executive Robert Hobbs said in a statement. "We remain very focused on quality. This focus has resulted in TGS passing up or postponing a number of low prefunded projects where the risk of achieving the required return is too high."
In early July, the firm saw full-year revenues between $970 million and $1.05 billion.
Its pre-funding ratio for 2013 - a key indicator that measures the amount of money oil firms put upfront to finance seismic surveys - was near the lower end of the previously guided range of 40-50 percent.
For the third quarter, that indicator was at 39 percent.
Recently oil and gas firms have been cutting back on investments to try and improve profits and save cash for dividends, due to rising costs impacting profit margins.
Suppliers and analysts expect investment growth by oil firms to slow sharply this year and in 2014, in line with a projected fall in oil prices. The spending boom has squeezed budgets and forced companies to sell assets and issue debt to pay dividends.
(Reporting by Gwladys Fouche and Terje Solsvik; Editing by David Cowell)
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