WorleyParsons Ltd., Australia’s largest oil and gas engineering company, plunged the most in four and a half years after cutting its earnings forecast following lower resource spending in Australia and Canada.
The stock slumped 14 percent to A$19.20 at 11:09 a.m. in Sydney, its sharpest decline since October 2008. It earlier plunged as much as 15 percent to A$18.89, the lowest since May 2009. The benchmark S&P/ASX 200 Index gained 0.4 percent.
Underlying earnings for the year ended June 30 will be between A$320 million ($314 million) and A$340 million as clients in Western Australia defer major projects and the company sees less than expected construction growth in the Canadian oil sands market, the Sydney-based company said today in a statement. The company had forecast in February that underlying earnings would exceed last year’s A$345.6 million.
“Despite weaker than anticipated market conditions impacting the second half result we continue to have confidence in the medium and long term growth prospects of our business,” Chief Executive Officer Andrew Wood said in the statement.
Resources companies including BHP Billiton Ltd. and Rio Tinto Group are reducing costs and delaying new operations as lower commodity prices crimp revenue. Ausdrill Ltd., an Australian mining services provider, last month cut profit expectations by as much as 20 percent as a result of the slowdown in the mining sector.