Technip Cuts Targets as Third-Quarter Net Misses Estimates
Technip SA (TEC), Europe’s biggest oilfield-services provider by market value, cut some financial targets after missing estimates for third-quarter profit.
Net income climbed to 150 million euros ($205 million) from 147 million euros a year earlier, the Paris-based company said today in a statement. This was lower than the 173 million-euro average of 11 analysts’ estimates compiled by Bloomberg.
Technip lowered full-year targets for subsea operating margin and revenue. Sales will miss the the upper end of a range set earlier the year.
“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.
Technip supplies pipes, platforms and equipment to energy producers to develop new fields and counter output declines at older ones. 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 15.9 billion euros, compared with a record 15.2 billion euros at the end of June, with an intake of 3.1 billion euros during the quarter, it said.
Technip full-year sales will be between 9.3 billion euros and 9.4 billion euros this year. It expects an operating margin in the subsea division of around 14 percent to around around 4.1 billion euros in revenue. The margin at its onshore-offshore unit will be 6.5 percent to 7 percent with sales of around 5.2 billion euros.
Technip’s previous targets were to increase sales as much as 16 percent to 9.5 billion euros this year. It expected an operating margin at its subsea division of about 15 percent to as much as 4.6 billion euros in revenue.
Technip won orders in the third quarter for pipe supplies to the Engina field in Nigeria, liquefied natural gas plants in China and the U.S. as well as for the world’s deepest gas pipeline in the Gulf of Mexico.
Saipem SpA (SPM), Technip’s largest competitor, reported a 60 percent drop 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.
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