Weir Group (LON:WEIR) revealed a silver lining to the cloud of gloom hanging over the oil services industry on Tuesday, cheering battered investors.
Weir said the third quarter had stayed tough as the fall in oil prices from more than US$100 a barrel to less than US$50 now took its toll.
Orders in the period had fallen 29% year-on-year and dropped 8% compared to the second quarter, the engineer said in a trading update.
But shares in the group shot up more than 6% after it said full-year earnings expectations had stayed in line with the market consensus.
Chief executive Keith Cochrane put the icing on the cake by adding: "We continue to expect a sequential improvement in our second half performance with our full year earnings expectations broadly in line with market consensus."
Oil services companies have been hammered as their oil major customers have cut jobs and investment and delayed or cancelled new projects.
Weir has not been immune, revealing in July that first-half orders had fallen 39% as US operators had cut rig numbers by more than half.
On Tuesday, Weir said a double-digit decline in US demand for oil rigs, as WTI oil prices fell below $50, had hit trading in oil & gas markets in the third quarter.
Mineral orders had been resilient in increasingly tough markets but US rig counts had fallen 14% in the last two months.
But along with some other companies such as Premier Oil, Weir said it was weathering the storm with pre-emptive measures.
it managed to stay on track partly by cost-cutting, saying £25mln of savings in the period had boosted the total in the last year to more than £110mln.
The savings would come from extra job cuts and closure or mergers of service centres around the world.
Cochrane said the group expected trading to stay tough in the fourth quarter with further declines in upstream oil and gas activity.
But he said: "We will focus on delivering further cost and procurement savings, alongside strong cash generation."
Shares rose 53p to 1128p in mid-morning trading in London.
Broker N+1 Singer said it was "still too early to get involved" in the stock, citing lower demand for its mining business as pits continue to close.
The broker said it was difficult to see an upside to the oil price as Iran re-enters the global oil market, propping up supply.
But it added: "More positively, power and industrial margins are up."
Russ Mould, investment director at AJ Bell, said some investors may have been surprised to see Weir rise by more than 5% at the market opening after a weak set of order intake numbers for the third quarter.
But Mould said the shares had already fallen by more than 40% this year so there was a lot of bad news already reflected in the price.
"An additional cost-cutting programme and unchanged profit guidance for the year will also have been welcome," he said.