Lupatech Rallies Most Since June on Petrobras Deal
Lupatech SA, Brazil’s biggest provider of oil equipment and services, gained the most in almost six months as a deal with Petroleo Brasileiro SA signaled sales may climb after it reported a plunge in profit.
Lupatech jumped 5.8 percent in Sao Paulo trading to 20.10 reais at the 3 p.m. New York time close, for the biggest increase since June 10.
Lupatech entered into a pact with Petrobras, the nation’s state oil producer, to provide technical services worth 112.2 million reais ($65.7 million) over five years, according to a regulatory filing. The contract is renewable for a further five years and begins in April 2011, the filing said.
“We see this contract as another step towards the expected pick up in sales over the next few years as development activities expand among” energy and petroleum companies in Brazil, Frank McGann, an analyst at Bank of America Corp., wrote in a note to clients. “We expect more announcements in coming months for new services and equipment.”
Lupatech slumped 30 percent this year through yesterday, compared with a drop of 1.3 percent for the benchmark Bovespa index. The company last month said third-quarter net income declined 99 percent from a year earlier.
Bank of America recommends buying Lupatech.
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