Aker Solutions Shares Jump, Beat Forecasts

Norwegian oil services company Aker Solution posted forecast-beating results in all key divisions on Friday, defying tightened spending in the sector and boosting its share price by more than 13 percent on Friday.

The Oslo-listed firm, which put several weaker divisions into newly created Akastor last year, posted only a slight decrease in its order backlog by the end of the quarter, a relief for shareholders who feared a bigger hit from the downturn.

The results suggest Aker has improved its cost control and is executing contracts signed before the oil price crash more efficiently than in the past.

Oil prices have dropped by about half to $60 a barrel since June on a global glut of oil, forcing energy companies, particularly in the North Sea, to reduce spending by delaying and cancelling projects.

"The share reaction is a relief that execution on the existing backlog is going pretty well as they deliver quite strong margins and have a good cash conversion on their working capital," ABG Sundal Collier analyst Haakon Amundsen said.

Aker Solutions (AKSO.OL) shares rose nearly 13 percent by 1308 GMT, outperforming a 1.5 percent rise by the European oil and gas index as analysts said Akastor's backlog for 2015 and beyond looked better than feared.

Its subsea division's profit rose by nearly half.

"These are very strong numbers and a fantastic start for 'the new' Aker Solutions," analyst Chr. Frederik Lunde at brokerage Carnegie said.

Friday's results mark only the firm's second quarter after the demerger so it may be too early conclude if it is materially more profitable than before, Bernstein Research said.

"Overall 8.1 percent underlying EBITDA margin is still below 2011-12 levels, and materially below peers," Bernstein said.

Aker Solution's 6.4 percent fourth-quarter net income margin trailed 7.9 percent for rival FMC Technologies (FTI) and 9.3 percent for Cameron.

Activity in the North Sea, the company's largest regional market, is expected to be lower over the next one to two years even though the firm has been chosen as main engineer for the $29 billion Johan Sverdrup field in the North Sea.

Statoil (STO) said on Friday it is moving ahead with plans to develop the giant field..

Fourth-quarter earning before interest, taxes, depreciation and amortisation (EBITDA) rose 19 percent to 786 million Norwegian crowns ($103 million), beating expectations for 647 million in a Reuters poll..

By Stine Jacobsen, Additional reporting Balazs Koranyi and Camilla Knudsen