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Weir Plummets After Pump Manufacturer Lowers 2013 Sales Forecast

Weir Group Plc (WEIR) dropped the most in 21 months after the U.K.’s biggest supplier of pressure pumps reduced its 2013 sales forecast, citing mining industry delays and a slower than anticipated recovery in its energy business.

The shares fell as much as 8.5 percent, the biggest decline since January 2012, and were down 7.6 percent at 2,085 pence at 9:07 a.m. in London, the lowest price in three months. The Glasgow, Scotland-based company’s stock was the biggest decliner today on the FTSE 100 index of Britain’s biggest companies.

“In terms of revenues, our previous guidance was for a modest single-digit increase and the reality is there were some caveats in that guidance,” Chief Executive Officer Keith Cochrane said today on a conference call. “The result of that is a flat revenue performance for the full year”

Third-quarter revenue and earnings were “slightly below” the company’s expectations due to delays in mining projects and a slow recovery in upstream oil and gas markets, Weir said today in a statement. Industrial unrest in South Africa will also crimp 2013 revenue, it said.

Full-year earnings before taxes, amortization and exceptional items will probably be 425 million pounds ($677 million) to 435 million pounds, on a constant currency basis, the Scottish manufacturer said. Weakness in the U.S. and Australian dollars, and most emerging market currencies, may reduce earnings by as much as 12 million pounds, it said.

In the oil industry, “upstream markets expanded more gradually than anticipated, with U.S. rig count actually declining over the third quarter and the number of wells drilled and completed in line with the second quarter despite oil prices remaining supportive of high activity levels,” Weir said. Low U.S. gas prices are restraining pressure pumping orders, it said.

To contact the reporter on this story: Natasha Doff in London at ndoff@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

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