Engineer Hunting rises as upbeat outlook defies sector woes
(Adds FD, analyst comments, share price)
LONDON, July 1 (Reuters) - British engineer Hunting, which makes equipment for use in oil and gas wells, said it was benefiting from growing business in the Gulf of Mexico and U.S. oil shale industry, defying a trend of earnings disappointments in the sector.
Companies such as Saipem, Aker and Subsea 7 - suppliers of everything from rigs to teams of engineers - have issued profit warnings this year, triggering worries among investors about the oil services and equipment sector.
Shares in Hunting gained 6.9 percent in Monday morning trading, topping Britain's midcap index, which was up 0.8 percent.
"We've come out with a statement saying steady as she goes, there's no surprise to our numbers, we remain in line with expectations, so I think the market has probably reacted favourably to that," Finance Director Peter Rose told Reuters.
Hunting also said it would establish a new facility in South Africa to provide kit for wells in East Africa, in Tanzanian and Mozambican waters. Drilling successes there have led to predictions that the region could become the world's third largest exporter of gas.
Rose said Hunting would initially spend around $20 million on the project, adding it was close to buying a property and the facility would be up and running at some point next year.
Analysts currently expect the company to post core earnings (EBITDA) of 167.4 million pounds ($253.9 million) for 2013, according to Reuters data.
"Given that many investors see 2013 as a potentially disappointing year given the company's positioning, this level of growth against headwinds should reassure them, especially since momentum should pick up from here," Barclays analyst Mick Pickup said.
($1 = 0.6593 British pounds) (Reporting by Sarah Young; Editing by Mark Potter)
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