Bouygues Shares Drop; Analysts Not Concerned

Shares in Bouygues Offshore fell more than three percent in early Wednesday trade after the French oil services firm posted a 42 percent fall in first half net profit to 18.6 million euros from 32.3 million. But analysts, not concerned by the slump in profits that was in line or better than expectations, said they remained positive on the stock amid signs that BOS' orders were picking up. They attributed the share price slide to a knee-jerk reaction from the market at seeing profits slump but said it was not serious given the stock had risen 91 percent since a year low of 35.10 euros hit on January 5. "The figures are not catastrophic," said analyst Joergen Lunshof at Credit Lyonnais Securities Europe (CLSE), pointing out BOS's first-half results reflected the dearth of investments by oil companies during the low crude prices of 1998-1999. Lunshof, who has a "buy" recommendation on BOS and a 75 euros price target, predicted the firm's profits would improve in the second half and return to 1999 levels in 2001 as oil investments picked up again.