WEIR Group chief executive Keith Cochrane denied the Glasgow-based engineering company is vulnerable to takeover after its shares plunged 5.5% as continued pressure on its oil and gas arm overshadowed a 27% rise in first-half pre-tax profit.

Weir saw earnings for the six months to the end of June climb 27% to £226 million, against £178m for the same period of 2011, as revenues rose 29% to £1.3 billion.

But the company has been hit by a plunge in activity in the shale gas sector on the back of falling prices which prompted a switch to shale oil exploitation.

This led Weir to lower its guidance for full-year profit to between £440m and £460m.

The company signalled the final outcome will be determined by the performance of its oil and gas business but would hit the lower end of expectations even without a pick-up in activity.

Analysts said they anticipated little change to market expectations with consensus earnings already sitting at around £450m.

Investors reacted by sending its shares down as much as 93p, or 5.5%, but the stock later recovered poise to close at 1655p, down 49p on the day.

This reversed some of the gains seen in recent weeks as the company's shares rebound from a slump that began in February.

There has been speculation that a rival might attempt a takeover of Weir, whose shares were trading at 2243p five months ago, but Mr Cochrane denied this was likely.

"We have a very clear strategy and focus for the group. We have great market exposure in terms of our three end markets. We know where we want to get to," he said.

Hydraulic fracking, where liquids are injected into layers of rock to release the hydrocarbons they contain, grew rapidly in the United States, prompting a fall in the gas price and a corresponding drop in activity.

Although there has been a rise in shale oil exploitation, Weir reported that customers, who had put in bumper orders for equipment in late 2011, had been left with inventories of equipment.

The company saw orders for its fracking equipment fall 7% year-on-year to £373m.

Mr Cochrane said: "We think we will start to see customers working through this excess inventory." But he added that the company could not predict if activity would pick up this month or instead towards the end of the year.

Weir has cut around one-tenth of its 3000-strong US-based workforce but Mr Cochrane insisted Weir would not change direction.

He said the shale gas industry has three to five years of strong growth ahead of it.

"The strategy is set for the long term and it reflects the fundamental attractiveness of the three end markets we are in. There will always be ebbs and flows."

With revenues at the division up 49% to £492m, including the contribution of recent acquisitions Seaboard and Novatech, operating profit was up 46% at £123m.

Weir's minerals division continued to prosper on the back of continued industry activity, notably in Africa and South America.

"We are seeing a combination of new projects coming through but now we are also seeing strong after-market growth," Mr Cochrane said.

Revenue from the business increased by 22% to £665m with operating profit up 20% to £120m.

Mr Cochrane said Weir's power division was starting to see increased activity from customers in the nuclear industry.

Revenues were up 11% at £154m while operating profit rose 39% to £11.7m. Weir declared an interim dividend of 8p, up from 7.2p. This will be paid on November 2.