Shares in oil and gas engineer Hunting took a hit this morning after the firm downgraded its profit forecast due to falling oil prices. Despite posting a 16% increase in profit for Q3, the London-listed energy services company highlighted declining sentiment and reduced client activity within the sector, as reported by .
"Whilst the outlook for the international and offshore subsectors of the industry continues to remain firm, the slower than anticipated improvement within the U.S. onshore has led to a deterioration in our short-term trading expectations," stated Hunting CEO Jim Johnson.
The company now anticipates its full-year profit for 2024 to be between $123m (£95m) and $126m (£97m), a decrease from its previous forecast range of $134m (£103m) to $138m (£106m), representing an eight per cent drop.
Upon market opening, Hunting's share price fell nearly 17%. The firm specifically cited break-even trading on its Titan operating arm segment as a cause for concern about the future, attributing it to the "ongoing subdued US onshore market and low natural gas pricing".
"Cost cutting initiatives are being planned to further right-size the Titan business to prevailing market conditions," it added. The group also announced the commencement of a new $300m committed borrowing facility, comprising a $200m revolving credit facility and a $100m term loan.
Earlier this month, Berenberg Research labelled Hunting as a "top pick" in the energy sector. The company's stock price had soared by 26 per cent since the beginning of 2024 until this morning, but it is now only up four per cent year-to-date.
CEO Johnson added: "Our balance sheet remains strong, coupled with a significantly improved year-end cash projection. We are pleased to have agreed new borrowing facilities in recent days,".
He also mentioned that "Management is also continuing to review high quality acquisition candidates, with our focus being on subsea and well completions."
