WRAPUP 3-European oil services see signs of recovery
* Subsea 7 bullish on medium to long term, risks lie ahead
* PGS EBIT slumps 70 pct yr-yr, Subsea 7's off 21 pct
* PGS trims 2009 core profit view lower end of estimate
* Saipem ups outlook as Q3 net 170 mln eur tops estimates
* PGS shrs down 6 pct, Subsea up 1 pct, Saipem down 0.3 pct
(Adds Saipem, updates shares)
OSLO, Oct 27 (Reuters) - European oilfield services companies Petroleum Geo-Services (PGS) (PGS.OL), Subsea 7 (SUB.OL) and Saipem (SPMI.MI) said while there were tough times ahead, signs of a gradual recovery were appearing in the offshore services sector.
The oil services sector has been hit hard by the global crisis and lower energy prices, feeling the effects from oil and gas producers, which have had to slash investments. Oil major BP (BP.L) beat third-quarter forecasts on Wednesday due to cost cutting. [ID:nLQ683027]
With oil back around $80 per barrel, services companies are expecting demand to rise in the medium to long term.
However, their margins are currently under pressure from fierce competition and overcapacity in some market segments such as seismic work. PGS, Subsea 7 and Saipem posted lower third-quarter profits.
For a graph on the Reuters oil price poll, go to here
PGS, which helps locate oil and gas reserves with seismic scans of the seabed, saw a 70 percent fall in July-September operating profit to $56 million, missing an average view of $74 million from a Reuters poll of 18 analysts. [ID:nOSL011507]
Subsea 7's operating profit fell 21 percent year-on-year to $108 million in the April-June period but topped a $79 million average forecast from a Reuters poll of 13 analysts.
Eni-controlled (ENI.MI) Saipem's adjusted net profit fell around 10 percent to 170 million euros in the third quarter, topping analyst expectations.
"The (oil price) trend reflects expectations for a significant growth in demand following the end of the financial crisis," Saipem said. However, "the rise in oil prices has not yet led to increased spending by the oil companies." [ID:nLR405664] Continued...
