Worley Parsons shares are getting smashed on shrinking business from the oil industry

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Worley Parsons shares are getting hammered as the resources and energy services company reports it expects shrinking revenue from the energy sector as oil prices fall.

The company reported revenue weaker by 4.7% to $3.614 billion for the first half. Underlying profit was up 3.6% to $100.7 million.

CEO Andrew Wood said there had been increased volatility across a number of commodities relevant to the company’s customers.

“The actions we took nearly 12 months ago to position the business to take advantage of market conditions have helped us to deliver a solid result despite declining revenues,” he said.

“We have improved margins in the first half through an intense focus on delivering what we promise to our customers and prudently containing our costs. The benefits of the restructure will continue to flow into the second half.”

However, the company said a significant decline in the price of crude oil had caused customers to reconsider investment plans.

“Market conditions make it difficult to accurately predict revenues and gross margin,” the company said. “Modest declines in the company’s revenue and gross margin are currently expected, but the company anticipates the benefits of actions already taken, and its continuing program of overhead reductions, to temper the effect on earnings.”

Its shares are down more than 14% to $9.57.

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