Oct. 31 (Bloomberg) -- Technip SA, Europe’s biggest oilfield-services provider by market value, reduced financial targets after missing estimates for third-quarter profit.
Technip lowered full-year forecasts for the subsea division’s operating margin and revenue, and raised its outlook for the onshore-offshore unit. Total sales will miss the upper end of a range set earlier this year, the Paris-based company said today in a statement.
“Technip’s performance was contrasted,” Chief Executive Officer Thierry Pilenko said in the statement. Revenue and profit were held back by currency exchange rates, he said.
Net income climbed to 150 million euros ($205 million) in the third quarter from 147 million euros a year earlier. That missed the 173 million-euro average of 11 analysts’ estimates compiled by Bloomberg.
Technip supplies pipes, platforms and 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 expected an operating margin at its subsea division 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 are expected to raise spending next year on exploration and production, he said.
The company also said today it has 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 pipeline in the Gulf of Mexico.
Saipem SpA, 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.
To contact the reporter on this story: Tara Patel in Paris at firstname.lastname@example.org
To contact the editor responsible for this story: Will Kennedy at email@example.com