Weir Group shares fall on profits warning

Weir makes pumps and valves for the mining, oil and gas industries

Shares in engineering firm Weir Group fell by nearly 8% in early trading on Monday after the company issued a profits warning.

Weir said full-year pre-tax profits could be as low as £413m if foreign exchange rates remained unfavourable - 7% below earlier forecasts.

Full-year revenues are now expected to be broadly flat.

Weir blamed project delays in mining and a slower than forecast recovery in its oil and gas division.

Third quarter revenues and profits were both slightly below expectations.

The Glasgow-based company, which makes pumps and valves for the mining, oil and gas industries, had expected a resurgence in US shale activity to outweigh a challenging environment in the mining sector.

Its minerals division saw a 2% fall in orders over a 39-week period, while original equipment orders were down 11%.

Weir said: "Mining end markets remained challenging, with commodity prices broadly flat over the period.

"Greenfield activity remained at a low level, with new projects experiencing order delays as customers continue to adopt a cautious approach to large investments.

"This has, however, been offset by a steady pipeline of brownfield and non-mining end market opportunities."

Orders in Weir's oil and gas division were up by 33% on the previous quarter but were "slightly below expectations"

Weir said markets expanded more gradually than anticipated, with the number of US rigs declining over the third quarter - in part because of low American gas prices.