Petroleum Geo-Services ASA declined in Oslo trading after the third-largest seismic surveyor posted 2013 earnings guidance that disappointed some investors and after it reduced its forecast for this year.
PGS sank as much as 3 percent, the most since Nov. 15. The company said it expects to report earnings before interest, tax, depreciation and amortization of $940 million to $980 million next year. Ebitda this year will be less than $800 million.
The earnings guidance is “softer” than expected and its forecast for multi-client investments, where a surveyor builds a data library to sell onto clients, is higher than had been estimated, Nordea Markets said in an e-mailed note. “We argue both Ebitda and Ebit will have to come down.”
PGS has experienced “challenging mobilizations and delayed starts for large projects in the South Atlantic,” it said in a separate presentation. The full-year contract margin is expected to be about 15 percent amid “somewhat softer” multi-client late sales than expected, it said.
Oil and gas producers operating in the waters off Africa, Norway and South America are boosting spending on exploration amid growing energy demand. With established fields maturing and new resources harder to find and develop, demand is growing for the underwater maps collated by companies including PGS, TGS Nopec Geophysical Co. and Polarcus Ltd.
PGS, the biggest seismic surveyor after CGGVeritas and Schlumberger Ltd., has 14 seismic vessels and offers seabed mapping services to oil and gas explorers.
The company, which held its capital markets day in Oslo today, is earning higher rates for its vessels amid growing demand and limited supply.
PGS has a history of taking a “conservative approach” to forecasts, so “we view this guidance as an attractive floor,” Pareto Securities ASA said in a note. “We don’t expect to make any major changes to estimates,” the broker said, reiterating its buy recommendation and 120 kroner price estimate.
PGS, based in Lysaker near Oslo, is fully-booked for the first quarter of 2013, 85 percent for the second quarter, 50 percent for the third, and 20 percent for the fourth, it said.
The company is “entering 2013 with a comfortable order book and good visibility,” RS Platou Markets analyst Thomas Oerner said in an e-mail. “The cautionary tendencies of PGS might not necessarily come as a surprise to the market.”
PGS fell 0.9 percent to 96.25 kroner by 12:45 p.m. in Oslo, curbing its gain during the last 12 months to 69 percent and giving it a market value of 21 billion kroner ($3.7 billion.) Almost 2.3 million shares have been traded so far today, compared with a three-month daily average volume of 1.8 million.
TGS Nopec Geophysical Co., Norway’s second-largest seismic surveyor, gained 1.6 percent and Polarcus Ltd. rose 1.1 percent. Electromagnetic Geoservices ASA, which also surveys oil and gas fields, advanced 0.8 percent.