Energy services group Wood tipped to report revenues near $11bn

The impact of the fall in oil prices in the second half of the year has seen Wood recently relegated from the FTSE 100.
The impact of the fall in oil prices in the second half of the year has seen Wood recently relegated from the FTSE 100.
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Wood, the Aberdeen-based energy services group, is expected to post strong full-year revenues this week on the back of signs of growing appetite for investment among customers in its key markets.

Although a pullback in the oil price in recent months has taken its toll on the group’s share price, investors will be focusing on the strength of its $10 billion (£750 million) order book when it reports on Tuesday.

Two significant contracts announced last week, including a project that will see a 400-strong Wood team install a gas turbine at a power station in North Carolina, have raised hopes of further growth.

The consensus among analysts is for Wood to report 2018 revenues of just under $11bn, up around 10 per cent on 2017, with earnings of $624m. Although revenues in the first half of the year were strong, profits were held back by integration costs associated with the acquisition of Amec Foster Wheeler.

Analysts at the Share Centre said the “hope here is that this will not be repeated to the same extent and we begin to see the synergies coming through”.

They added: “Interest will also focus on the order book and whether it has built upon the previous level.”

The impact of the fall in oil prices in the second half of the year has seen Wood recently relegated from the FTSE 100 after just five months back in the top flight. Russ Mould at AJ Bell pointed out Wood’s latest stay in the FTSE 100 was as brief as previous ones.

“Sentiment does appear to have soured on the wider oil services and equipment sector thanks to a retreat in the price of crude,” he added.