Vallourec SA, a producer of steel pipes for the oil and gas industry, slid the most in more than two months in Paris trading after the company said profit fell by half and it couldn’t confirm earlier sales growth targets.
Vallourec dropped 7.5 percent to 32.955 euros by the close of trading in Paris, the steepest decline since May 11. Net income dropped to 56.6 million euros ($70 million) from 112.1 million euros a year earlier, the Boulogne Billancourt, France-based company said in a statement.
Chairman Philippe Crouzet said on a conference call yesterday that the company won’t confirm previous targets for sales growth as its industrial businesses in Europe and Brazil have deteriorated and are unlikely to rebound this year.
“The continuous downward revision of guidance from Vallourec management at such short intervals risks to undermine the appeal of a story that has great long-term upside,” JPMorgan Cazenove said in a note to investors today.
The company’s shares fell 20 percent on May 11 after cutting its forecast for sales growth in half.
“The demand for pipes for sectors outside oil and gas remains weak,” Crouzet said. “We aren’t confirming revenue growth guidance.”