StockMarketWire.com - Engineering company Weir warned that annual operating profits in its oil and gas division would be below previous expectations amid weakness in US shale markets.

The company said its total orders from continuing operations in the three months through September rose 4% but were flat on a like-for-like basis.

Oil and gas orders dropped 32%, 'as capital constraints intensified in North American markets', the company said.

Weir said a cost reduction programme of around £30m was underway in the division, which would generate an exceptional restructuring charge of around £20m.

The division was 'moderately profitable' in the third quarter, but was expected to be 'sequentially lower' in the fourth.

Weir said there was no change to its full-year guidance for its minerals and or ESCO ground-engaging tools divisions.

Minerals orders in the third quarter rose 17%, while ESCO orders on a pro-forma basis rose 9%.

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