Bloomberg News

Subsea 7 Declines to Three-Week Low After Earnings Miss

November 02, 2011

(Updates with closing share price in second paragraph.)

Nov. 2 (Bloomberg) -- Subsea 7 SA, the oilfield-services provider formerly known as Acergy SA, declined to the lowest level in three weeks in Oslo trading after missing earnings estimates as margins shrank and projects suffered delays.

Subsea declined 0.4 percent to 113.3 kroner by the close of trade in the city, the lowest since Oct. 7. Earnings before interest, taxes, depreciation and amortization increased to $279 million in the third quarter, missing the $319 million average estimate of 19 analysts surveyed by Bloomberg.

“The report was characterized by somewhat lower than expected margins and vague guidance for 2012,” according to a note written by Goeran Andreassen, an analyst at RS Platou Markets AS who has a “buy” recommendation on the stock.

Activity offshore West Africa is set to be “significantly lower” in 2012, while margins are expected to improve in the North Sea, the company said today in a presentation. Subsea 7 had an order backlog of about $7.9 billion on Sept. 30 even with global economic turmoil, it said today in a separate statement.

“Higher activity levels in the North Sea are, as expected, still impacted by margin pressure on contracts awarded in 2010,” Chief Executive Officer Jean Cahuzac said in the statement. “Operational delays on projects in the North Sea have also impacted these results.”

--Editor: Tony Barrett, Reed Landberg

To contact the reporter on this story: Stephen Treloar at streloar1@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net


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