Hunting reaffirms outlook despite slide in Q1 earnings

(Sharecast News) - British engineering firm Hunting reiterated its full-year outlook on Wednesday, despite a sharp slide in first-quarter earnings. The 152-year-old business, which supplies the oil and gas industries, said earnings before interest, tax, depreciation and amortisation was $23.2m in the first quarter, with a margin of 10%. That compares to EBITDA of $38.7m and a 14% margin in the same period a year previously.

However, Hunting stressed that the performance was in line with expectations, as key milestones on current subsea contracts are weighted to the second quarter. The majority of earnings growth across the business is also slated for the final six months of the year, given order execution and delivery timings.

As a result, the British firm reiterated guidance for annual EBITDA of between $145m and $155m.

Jim Johnson, chief executive, said: "Hunting has delivered a solid first quarter performance. We remain vigilant regarding Middle East volatility, with our people remaining safe and our facilities fully operational.

"We are seeing excellent order book momentum across South America and the US onshore market. By restructuring our global operations and continuing our share buyback programme, we are positioning Hunting for robust, long-term growth and enhanced shareholder returns."

As at 0930 BST, the FTSE 250 stock had shed 5% at 485p.

Berenberg, which has a 'buy' rating on Hunting and a 580p price target, said all product lines had delivered in line with management expectations during the quarter.

It said: "Hunting continues to win new awards, and has seen strong momentum in the subsea division and in North America more broadly.

"There are some potential large tenders in the short-term tender pipeline that could well exceed $1bn, and the award of these tenders could provide catalysts for the shares over the next 12 months."

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