Hunting PLC (LON:HTG) shares fell on Tuesday as the firm warned that its full-year profits would be pushed to the lower end of market expectations because of a continuing decline in US onshore drilling.
In a trading update on Tuesday, the FTSE 250 energy services provider said that its third-quarter underlying profits (EBITDA) had dipped below the US$35mln and US$42.4mln it had pulled in the first and second quarters respectively.
Sales were squeezed in the last three months by a slowdown in drilling across North America, said Hunting. The manufacturer of pipeline equipment anticipated US drilling will keep going downhill, affecting results for the second half of the year.
Volatile oil prices in the past few months have led to lower investment and budgets being exhausted in exploration and production companies, it added.
Weakening sales in its Titan division, which manufactures perforating guns for drilling, was “partially countered” by ongoing improvements in offshore and international operations with a strong quarter for its Electronics business, as demand for downhole measurement tools has remained steady, the group said.
Hunting's net cash, excluding lease liabilities, at the end of the period was US$58.5mln.
In early morning trade, Hunting shares were 3.5% lower at 405.40p.