The shares of John Wood (LSE: WG) advanced 2% to 795p during early London trade this morning after the company said its engineering division’s operating profits were on track to grow by 15% this year.
John Wood announced it was likely to meet the market’s growth expectations for 2013, while confirming it had won pipeline engineering contracts with Dow Chemical (NYSE: DOW.US) in the USA. Highlighting the group’s international dealings, John Wood also confirmed it had won work with Shell (LSE: RDSB) (NYSE: RDS-B.US) on a project in Iraq.
Elsewhere, the company said it was benefiting from increased activity in the US shale regions, while its work on Ichthys and Mafumeira Sul upstream projects were progressing well.
The company added:
“Looking further ahead, our strong balance sheet, market fundamentals, leading positions, and balance of opex and capex related activities position the Group well for longer term growth.”
With a market cap of £2.8bn, John Wood’s shares trade at 12 times expected earnings, and offer a prospective dividend yield of 1.8%.
Of course, whether that valuation, today’s update and the future prospects for the energy industry all combine to make shares of John Wood a ‘buy’ remains your decision.
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> Mark does not own any share mentioned in this article.
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