Once a market darling, oil, gas and resource services company WorleyParsons Limited (ASX: WOR) has seen its share price sink more than 3% today.
Shares were changing hands at around $15.67 in late afternoon trade – a far cry from the $54.19 the shares hit in 2007. In fact, shares in WorleyParsons have been sliding from $30 in 2011, as the company has been hit by falling earnings thanks mainly to the declining Australian resources infrastructure market. A fact, Bradken Limited (ASX: BKN) and Austin Engineering Ltd (ASX: ANG) can attest to, as we noted in this earlier article.
Ongoing restructuring costs have dogged WorleyParsons for some time now, forcing the company to announce a restructure of its businesses, at a cost of around $35 million. In the last half, WorleyParsons announced it was reducing staff by more than 500, although the company still employs a whopping 37,500 people across 43 countries.
And the share price has slipped today, despite the company announcing that it had been awarded a significant five year contract for the supply of engineering, procurement and construction management (EPCM) services to a natural gas pipeline in Eastern Europe. The company did not say what the contract was worth, but the total project is estimated to cost US$11.7 billion.
Last week the company also announced the award of a long-term engineering services contract in Trinidad and Tobago.
But the announcement of new contract wins is no salve for WorleyParsons' ails, likely why the market has totally ignored these recent announcements and pushed the share price down.
Given the worsening outlook in the mining services sector not just in Australia but globally, the future certainly doesn't look all that bright for the former market darling, and there are better opportunities out there for Foolish investors. With miners from giants BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) through to the smallest explorers cutting back their capital expenditure, the only way appears to be down for WorleyParsons.
