0337 GMT [Dow Jones] STOCK CALL: Margins remain the key swing factor for SembMarine’s (S51.SG) earnings estimates, DNB Markets says. While it is forecasting revenue growth over 2012-14, it expects EPS to decline 12%, 1% and 16%, respectively. It says the expected 2014 EPS decline is due to lower margin assumptions on potential Brazilian orders. It adds SembMarine securing a US$385.5 million contract from Helix Energy (HLX) to build a semisubmersible well intervention rig will result in limited estimate changes. It notes SembMarine has achieved S$1.7 billion of new orders year-to-date, about 15.6% of DNB’s 2012 new order estimates. The contract adds 7.7% to the current orderbook, taking it to S$6.8 billion.
“Based on 2012 revenues, the orderbook offers 16-17 months of earnings visibility.” The house adds, “ultra-deepwater market continues to strengthen each day, which we believe would bring us closer to the next rig ordering cycle.” It keeps a Buy call with a S$5.50 target on the stock; SembMarine is up 1.1% at S$5.31.
[I]- Leslie Shaffer, Dow Jones & Company[/I]