Oil Services Group Technip Eases Concerns Over Oil Sector Strife
PARIS, Oct 30 (Reuters) – French oil services group Technip reported higher than expected third-quarter profit and revenue and stuck to its targets on Thursday, reassuring investors spooked by the spending slowdown by oil majors and the decline in oil prices.
Shares in the group, which have shed 17 percent this year after losing more than 20 percent last year on concerns about spending cuts by oil majors, jumped nearly 8 percent in early trading.
"The stock is rebounding because they have confirmed their 2015 guidance. That quells – temporarily? – concerns about disaster scenarios," Natixis analyst Alain Parent said, adding that recent comments from Technip rival Saipem on the slowdown and from client Total on cost-cutting should encourage investors to remain cautious.
Shares pared gains slightly after the initial leap and were up 3.1 percent at 57.19 euros by 0823 GMT.
Quarterly group revenue rose 18 percent to 2.82 billion euros ($3.55 billion), Technip said in a statement, while operating profit rose 10 percent to 241.5 million euros, giving a margin of 8.5 percent. Net profit was down 12.3 percent at 131.6 million euros.
Analysts had expected net profit of 157.8 million euros, operating profit of 230.5 million and revenue of 2.68 billion on average, according to a Thomson Reuters I/B/E/S poll.
Concerns over Technip's outlook had been heightened by comments from Total's new CEO on Wednesday, saying that his company's priority was to cut costs and investments while seeking better terms from suppliers, and Saipem's warning earlier in the week that its full-year results would be at the low end of expectations.
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