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Weir warns of substantial reduction in 2015 revenue

Published 25/02/2015, 09:18
© Reuters.  Weir warns of substantial reduction in 2015 revenue
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WEIR
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(Reuters) - Engineer Weir Group Plc (L:WEIR) said it expected a "substantial reduction" in 2015 revenue on a constant-currency basis, due mainly to the slowdown in the global oil and gas industry.

Weir's stock fell more than 10 percent in early trading on Wednesday, making it the top loser on the FTSE-100 index (FTSE).

Many oil and gas exploration, production and services companies are slashing capital spending in response to lower oil prices.

Weir Chief Executive Keith Cochrane said that while visibility in the oil and gas industry remained limited, the company's cost-cutting measures would only partly offset the impact of substantially lower demand.

The company, which did not provide a forecast figure for 2015 revenue, also said it expected lower operating margins.

Weir, which makes valves and pumps for the energy and mining industries, said in November that it planned to close five small manufacturing plants, cut jobs and consolidate service centres in 2015 to reduce costs.

The company's revenue was nearly flat at 2.44 billion pounds ($3.79 billion) in the year ended Jan. 2, compared with 2.43 billion pounds a year earlier.

Pretax profit fell 2 percent to 409 million pounds, while operating margins fell to 18.4 percent from 19.2.

Weir's shares were down 8.8 percent at 1,698 pence at 0910 GMT.($1 = 0.6441 pounds)

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