BG Group Shares Plunge After Egypt Turmoil Hits Earnings Outlook
LONDON, Jan 27 (Reuters) - Oil and gas firm BG Group warned that turmoil in Egypt would hit its output this year and next, weighing on future earnings and sending its shares plunging 15 percent.
BG said in a surprise statement on Monday production this year would be as much as 11 percent lower than analysts were expecting, and potentially 7 percent behind 2013 output. It also cut its 2015 production forecast by as much as 14 percent.
"It's a blood bath," said Santander analyst Jason Kenney. "I think we're looking at a 15 percent cut in earnings (forecasts) for 2015."
The group is not the only energy company struggling to grow. Larger rival Shell earlier this month issued a profit warning, while Chevron Corp, the second-largest U.S. oil company, has also warned it will likely miss forecasts.
BG also warned costs per unit will rise due to investment in new projects in Australia and Brazil, while a project off the British coast would ramp up more slowly than expected and its entitlement to output in Trinidad and Tobago would decline.
The developments add up to the latest in a series of disappointments from BG and heap pressure on a mostly new management team. Chief Executive Chris Finlayson took over a year ago and Financial Director Simon Lowth joined in December.
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