Weir expects operating profit to beat expectations
Source - SMW
Weir said in recent weeks, upstream North American markets recovered more strongly than formerly anticipated.
Higher levels of frack fleet utilisation and significant tightening of industry capacity are both benefiting the group's oil and gas division.
As a result, it saw increased volumes, stronger operating leverage and modest pricing recovery ahead of prior expectations, and delivered low double-digit operating margins in the first half.
Assuming supportive market conditions continue, the division is expected to deliver low-teens operating margins through the second half with full year revenues and operating profits that are above the upper end of analysts' estimates.
This growth will be partially offset by one-off charges to operating profit of £13m related to previously announced legacy contract delivery challenges in the Gabbioneta business, part of the group's flow control division. Expectations for the minerals division remain unchanged.
The updated outlook for the Group's full year performance is now for strong constant currency revenue and profit growth. As previously indicated, profits will be weighted to the second half of the year.