Rotork shares fall as Russian sanctions affect orders

14th Nov 2014 15:07

Rotork's shares slumped on Friday after the actuator manufacturing and flow-control company said revenues slipped in the third quarter due to the timing of deliveries.Revenues declined by 1% and were down 0.5% on an organic constant currency (OCC) basis. The decline came after OCC revenues had risen by 4.4% in the first half.Group order intake increased by 5.6% OCC, but was down 12% in the fluid systems division due to strong comparatives and the loss of orders caused by the tightening of trade sanctions in Russia.Controls, the largest division, saw 15.9% order growth while gears orders jumped 23.3%. Instrument orders, however, were down 5.8%.The company said it "continues to expect to make further progress in the full year", but margins are estimated to be flat on 2013.Analyst Michael Blogg from Investec said the update was "disappointing" with Rotork's end-markets delivering "variable" performances.Blogg, who put his 'add' rating under review, said that consensus forecasts are likely to be "trimmed a little".He had previously expected organic revenues for the second half as a whole to grow by 5% so "do[es] not expect 'catching' up in the fourth quarter to be enough to close the gap completely".Meanwhile, while Numis Securities maintained its positive 'add' stance on the stock, the broker noted that oil prices - currently trading at a four-year low - "could be a negative looking forward". Oil and gas accounts for around 59% of Rotork's group revenues.Rotork was down 3.3% at 2,417p by 15:15.