Technip SA (TEC), Europe’s largest oilfield-services provider by market value, fell the most in two years in Paris trading after missing profit estimates and lowering financial targets.
Technip dropped as much as 8.1 percent, the biggest decline since September 2011, and was down 7.1 percent at 79.85 euros as of 10:59 a.m. local time. Trading volumes were already more than triple the three-month daily average.
The French company has suffered from unfavorable foreign-exchange rates, curbing profit from supplying pipes, platforms and equipment to oil explorers and producers. The completion of North Sea projects may make it more dependent on the Gulf of Mexico, where it sees lower profitability in the fourth quarter.
Net income climbed to 150 million euros ($205 million) in the third quarter from 147 million euros a year earlier, Technip said today in a statement. That missed the 173 million-euro average of 11 analysts’ estimates compiled by Bloomberg.
“Third-quarter results came in weaker than expected,” Bertrand Hodee, a research analyst at Raymond James Euro Equities, said in a report. He cut his rating on the stock to market perform from outperform.
Technip lowered full-year forecasts for operating margin and revenue at its subsea division, and raised its outlook for the onshore-offshore unit. Total sales will miss the upper end of a range set earlier this year, it said.
“Technip’s performance was contrasted,” Chief Executive Officer Thierry Pilenko said in the statement. Revenue and profit were held back by currency rates, he said.
The company, based in Paris, supplies equipment to energy producers to develop new fields and counter output declines at older deposits. Investment in exploration and production may rise as much as 8 percent next year as companies seek to add reserves and expand output from Norway to Australia, the IFP Energies Nouvelles policy group said this month.
Technip’s contract backlog rose to a record 15.9 billion euros, compared with 15.2 billion euros at the end of June, with an intake of 3.1 billion euros during the quarter, it said.
Full-year sales will be 9.3 billion euros to 9.4 billion euros, down from a previous target of as much as 9.5 billion euros. It expects an operating margin in the subsea division of about 14 percent, with about 4.1 billion euros in revenue. The margin at its onshore-offshore unit will be 6.5 percent to 7 percent with sales of about 5.2 billion euros.
Technip previously forecast a subsea operating margin of about 15 percent with as much as 4.6 billion euros in revenue, and a margin of 6 percent to 7 percent for the onshore-offshore division for revenue of as much as 5.1 billion euros.
“For the medium term we are confident that the trend for both segments -- subsea and onshore-offshore -- remains positive,” Pilenko said on a conference call. Energy companies will raise spending next year on exploration and production, according to the CEO, who said Technip may give an outlook for 2014 at the end of December.
The company also said today it won two orders valued at $730 million for the TEN project off Ghana. In the third quarter, it received orders for pipe supplies to the Engina field in Nigeria, liquefied natural gas plants in China and the U.S., and the world’s deepest gas pipe in the Gulf of Mexico.
Saipem SpA (SPM), Technip’s largest competitor, reported a 60 percent slump in third-quarter profit earlier this week and is forecasting an annual net loss of as much as 350 million euros. The Italian company recorded a two-thirds decline in new contracts in the period compared with the previous three months.
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