LONDON, July 30 British engineer Weir Group
posted a smaller than expected fall in first-half
profit and said a recovery in the U.S. shale industry should
help to offset weaker mining equipment markets in the months
Shares in Weir, which makes pumps and valves for the mining,
oil and gas industries, rose 4 percent in early Tuesday trading
after the group kept its full-year forecasts for revenue and
Some analysts had feared these could be cut after mining
equipment makers such as Caterpillar, Sandvik,
and Atlas Copco reported falls in order bookings as
lower metal prices force miners to cut costs, often by delaying
However, Weir Chief Executive Keith Cochrane said a fall in
mining equipment orders was being offset by supplying tools and
services to miners looking to increase efficiency at, or expand,
"These results demonstrate our ability to deliver in line
performance despite challenging market conditions," he said
during a call with reporters.
First-half pretax profit was down 14 percent at 193 million
pounds ($296 million), ahead of analyst forecasts of 188 million
pounds, according to Thomson Reuters I/B/E/S data.
Weir maintained its full-year forecast for a single digit
percentage rise in revenue with broadly stable margins.
Cochrane said Weir's resilience over peers was partly down
to the diversity of its customer base, so that a slowdown in
conventional mining projects could be offset by demand in oil
sands or coal bed methane industry, where business is picking up
after a slowdown in the second half of last year.
Andrew Douglas, analyst at Jefferies, said the profit had
come in below his expectations but was encouraged by stable
orders for the mining division.
"We like the fact that order intake in minerals for the
second quarter was broadly flat year on year," he said.
Analysts at Bank of America/Merrill Lynch were encouraged by
the numbers and said they regarded Weir stock as one of the
cheapest in Britain.