Shares in Petrofac (PFC) tumbled 15 per cent after the oil services group said two significant contracts have been delayed, hitting earnings expectations. In Abu Dhabi, the Upper Zakum field development is being re-engineered and this will result in revenues being deferred "from 2014 into 2015 and beyond". Meanwhile, a "rephasing" of the Berantai development project in Malaysia will result in a deferral of revenues "from 2014 to later years".
Analysts from Investec expect to slash their earnings forecasts for 2014 and 2015 by 15 per cent and 10 per cent, respectively. For its part, Petrofac said it now expects "flat to modest growth" in 2014 and indicated it will need to win extra contract awards in order to meet its existing 2015 target of EPS of $2.50 (156p).
If there was a silver lining to the profit warning, it's that 2013 estimates have been kept in line and that the reduced expectations for 2014 and 2015 are down to the re-engineering of projects rather than a shortfall in new orders. Petrofac's order backlog was also unchanged at $14.3bn.
