Sector movers: Oil services hit by Wood Group disappointment

13th Dec 2012 15:45

Wood Group dragged the oil services sector into the red on Thursday following a pre-close trading update which pointed to mixed trading in its Engineering division.The company said that it expects to deliver "good growth" this year in line with expectations, but shares dropped 3.7% to 740p in afternoon trade after the firm said that it expects "some reduction in activity" in the oil sands market in 2013.In downstream, Wood Group said that market outlook remains subdued though it had seen some improvement in performance in the second half. Meanwhile, in turbo-machinery division Wood Group GTS, the company said that it has recognised reduced margins on its contract with GWF.Credit Suisse said that it has cut its Wood Group forecasts for 2013 and expects consensus forecasts to come down also, largely on softer GTS profits. "In GTS, large lump-sum contracts (GWF, as flagged earlier in the year) are less profitable than hoped, and we have brought our earnings down modestly, offset by anticipated good demand from higher run-time on US turbines," the broker said.Credit Suisse maintained its 'neutral' rating and 925p target price for the stock, "largely as we believe this high-quality name is fairly priced at current levels".Canaccord Genuity also provided some additional downward pressure after reducing its target price for the stock today from 920p to 900p, retaining its 'hold' recommendation.FTSE 100 engineering group AMEC was also out of favour this afternoon, with shares down 2.21% at 1,020p, joined by smaller peers GETECH and Lamprell.Top performing sectors so far todayForestry & Paper 7,152.18 +1.07%Construction & Materials 3,321.96 +0.99%Automobiles & Parts 5,323.78 +0.98%Mobile Telecommunications 3,808.27 +0.85%Financial Services 5,368.10 +0.77%Bottom performing sectors so far todayPersonal Goods 19,944.42 -1.65%Oil Equipment, Services & Distribution 24,224.38 -1.57%Pharmaceuticals & Biotechnology 9,573.30 -1.35%Health Care Equipment & Services 3,800.41 -1.11%Household Goods & Home Construction 8,193.83 -0.85%BC