INTERNATIONAL energy services company Wood Group, which has its headquarters in Aberdeen, is to issue its year-end results on Tuesday.
Sandy Glen, of broker Redmayne-Bentley’s Highland branch, said: “In a trading update in early October 2008 the company was very bullish about its strong level of ongoing trade and growth expectation in all sectors, which should reflect well in its 2008 year-end numbers.
“At that time it confirmed its overall funding position was good with bank facilities of about £700million committed to July 2010.”
However, Mrs Glen said recent months had seen a dramatic fall in oil prices and its negative impact on the entire oil sector.
She added: “With such a steep decline in the oil price, which remains subdued, there is industry concern that this will lead to a significant reduction in capital expenditure by the main oil companies with a knock-on effect of reduced business and thus reduced earnings for oil service sector companies.
“Despite this negativity, the overall market sentiment for Wood Group remains largely bullish, with commentators citing the fact that the company is well-placed to weather the economic downturn.
Consensus estimates for 2008 show a big increase in pre-tax profits to £238million from £142million the year before, an increase in earnings per share to 33.9p from 17.8p and increased dividend per share of 6.42p from 3.49p.
Broker recommendations show a consensus for a weak buy.