Shares in Saipem are yet to open by 0900 GMT after the Italian groupslashed its profit outlook, hitting shares in parent ENI and sendingshockwaves through the rest of the European oil services sector.
In the surprise enouncement after market close on Tuesday, Saipem operatingprofit (EBIT) in 2012 would be 6 percent lower than previous forecasts and, for2013, predicted a fall of 80 percent in EBIT for its onshore business and a 70percent fall in offshore activity.
Shares in Eni, which controls Saipem, are down more than 4 percent, withpeers also hit hard. Petrofac's drops more than 7 percent, Subsea 7 sheds 6 percent, Amec's shares are down more than 2 percentand Wood Group falls more than 1 percent.
"It's clearly the Saipem profit warning over night," Sanjeev Bahl at NumisSecurities says.
"There has been a significant change in their guidance for 2013...They'reciting more competition in their core markets, delays and lower activitylevels".
Exane and Deutsche both downgrade Saipem, to 'neutral' and 'hold',respectively, with Deutsche describing it as "a fallen star".
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Petrofac (PFC)
Wood Group (J) (WG.)