Scotland business

Weir Group shares fall on profits warning

Weir facility
Image caption Weir makes pumps and valves for the mining, oil and gas industries

Shares in engineering firm Weir Group fell by nearly 8% in early trading on Monday after the company issued a profits warning.

Weir said full-year pre-tax profits could be as low as £413m if foreign exchange rates remained unfavourable - 7% below earlier forecasts.

Full-year revenues are now expected to be broadly flat.

Weir blamed project delays in mining and a slower than forecast recovery in its oil and gas division.

Third quarter revenues and profits were both slightly below expectations.

The Glasgow-based company, which makes pumps and valves for the mining, oil and gas industries, had expected a resurgence in US shale activity to outweigh a challenging environment in the mining sector.

Its minerals division saw a 2% fall in orders over a 39-week period, while original equipment orders were down 11%.

Weir said: "Mining end markets remained challenging, with commodity prices broadly flat over the period.

"Greenfield activity remained at a low level, with new projects experiencing order delays as customers continue to adopt a cautious approach to large investments.

"This has, however, been offset by a steady pipeline of brownfield and non-mining end market opportunities."

Orders in Weir's oil and gas division were up by 33% on the previous quarter but were "slightly below expectations"

Weir said markets expanded more gradually than anticipated, with the number of US rigs declining over the third quarter - in part because of low American gas prices.

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