Wellstream, the oil services company, has unsettled investors after warning that uncertainties over future contracts could hit earnings in 2010.
So despite the company saying trading was in line with expectations, with the second half of 2009 expected to be slightly ahead of the first, its shares have dropped 47.8p to 490.7p - a 9% decline.
On the contract front it said awards in Brazil had contributed to a £170m order backlog, but this is down from £215m when it reported its half year results in August. And it added that outside Brazil, there was uncertainty over the timing of contracts and this would continue through the first half of 2010. Analysts at FinnCap said:
We are positive about the group's product base and longer term market trends, however the statement - while in line - is somewhat disappointing on the level of order backlog and downbeat about 2010 and has negatively impacted the opening share price. On consensus earnings of 34.7p for 2009, the shares stand on 14.3 times and 13.5 times next year. This is broadly in line with the sector average (ex-Hunting). Sell.
