October 15, 2015 / 1:30 PM / 3 years ago

Sulzer warns on profit, steps up cost cuts

ZURICH, Oct 15 (Reuters) - Swiss pump maker Sulzer said on Thursday full-year profit was likely to fall by more than it had forecast earlier this year, citing weak demand from China and oil and gas customers.

The company, 63 percent controlled by Russian billionaire Viktor Vekselberg, said operating profit for 2015 would be likely to fall by 10 to 15 percent from 302.9 million Swiss francs ($317.41 million) in 2014.

Previously, Sulzer said operating profit would fall “moderately”, which the company defined as 3 to 5 percent.

Sulzer, which had cut 410 jobs this year, is stepping up cost-cuts, including the closure of a U.S. pump factory near Houston. The company said it was also considering closing its foundry in Finland. More than 250 more jobs could go, 87 in the United States and 175 in Finland.

“There is little doubt about the impact depressed end-markets in oil and gas industries are having on Sulzer,” Credit Suisse analyst Patrick Laager wrote in a note. “The company is continuing to cut its costs in all three divisions.”

The shares fell 2 percent to 99.10 francs by 1303, while the Swiss stock market was higher.

Orders through the first nine months of 2015 rose 3 percent on a currency-adjusted basis to 2.27 billion Swiss francs.

The Winterthur-based company expects a weak fourth quarter. For the full year, that means a “slight decline in order intake and a moderate decline in sales on a currency-adjusted basis,” it said.

Sulzer’s chief executive Klaus Stahlmann quit in August and he was replaced on an interim basis by chief financial officer Thomas Dittrich. A company spokesman said on Thursday it was still in the process of finding a permanent replacement.

“There is no news regarding this process, which may disappoint the market,” analysts from Bank J. Safra Sarasin in Zurich wrote. ($1 = 0.9543 Swiss francs) (Editing by Jane Merriman)

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