LONDON -- Weir (WEIR 0.79%) released its interim management statement for the four months between Dec. 29, 2012, to April 30, 2013, this morning, with its share price falling 1.3% in early trade following a mixed reaction by the market.
This followed the announcement of a lower opening order book in the first quarter, down 14% on a reported basis against the same period last year, with the oil and gas division particular underperforming and contributing to lower revenues. Management also stated that "operating profits were down on the prior year period, with margins also affected by one-off costs in relation to the continued restructuring of the pressure pumping operations".
Like-for-like input in the first quarter saw a 14% decline against Q1 2012 but an increase of 14% against Q4 2012, with growth seen in minerals and oil and gas. Original equipment input was 23% lower than the comparative quarter last year, which saw a number of large project orders.
However, the firm stated that trading in the period has been resilient and in line with expectations. As such, full-year guidance remains unchanged, with low single-digit revenue growth and broadly stable margins expected. Weir anticipates growth in the second half of the year to offset lower first-half revenues and margins.
In other positive news, recent acquisitions such as Mathena, a leading provider of pressure control rental equipment and services for onshore oil and gas drilling, contributed well since being incorporated into the group. These buyouts caused net debt to increase against the prior year period, though.
It appears that the commodities cycle hasn't quite turned yet, then, with investors still bearish despite Weir's share price having increased a massive sevenfold since 2009's low of 311 pence. But a yield of around 1.8% at today's price still doesn't seem to offer potential shareholders much reason to buy while there is still negative sentiment around the sector.
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