Norway's PGS warns of margin shortfall

By John Acher

OSLO (Reuters) - Margins at Norwegian seismic surveyor Petroleum Geo-Services will fall short of expectations this year as its vessels spent longer than forecast in dry dock, the group said on Wednesday, hitting its shares.

Fourth-quarter productive time for its vessels and related margins and revenue in the marine contract segment have been lower than forecast in its third-quarter report, PGS said in a statement.

Steaming, stays in shipyards and standby time for its vessels in the fourth quarter are expected to account for around 31 percent of total capacity, above previous guidance of 22 to 25 percent, PGS said.

Two of the group's Ramform seismic vessels spent longer than expected in dockyards and one experienced a delay in obtaining an operating permit, PGS said.

"The company expects the 2007 full-year marine contract (earnings before interest and tax) margin to be marginally below 50 percent," PGS said.

PGS (PGS.OL: Quote, Profile, Research, Stock Buzz) shares traded down 7.6 percent at 139.50 crowns by 1103 GMT, after touching a three-month low of 137.75 crowns, valuing the company at about $4.5 billion. The Oslo bourse benchmark index fell 0.8 percent.

"They held a capital markets day (for investors) at the end of November, so something must have gone really wrong in December," said Fearnley Fonds analyst Kjell Erik Eilertsen. "This is probably a one-off, but it has quite a powerful impact."

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