French steel-pipe maker Vallourec SA (VK.FR) Thursday lowered its sales growth target for the full year to 5% from a previous 10% after its operating performance in the first quarter was weaker than expected.

Vallourec said its net profit for the first three months of the year plummeted to EUR29 million from EUR82 million in the same period in 2011, while its total sales rose 4% to EUR1.20 billion. Analysts were expecting a net profit of EUR44 million and revenue of EUR1.17 billion, according to Factset.

Vallourec's earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 25% to EUR152 million, the company said.

The company attributed the earnings decline to a contraction of its non-oil and gas business. Demand for products related to car manufacturing and mechanical industry fell significantly, the company said.

"We saw a moderate recovery in orders but it is weaker than what we expected," Olivier Mallet, the company's chief financial officer, told reporters in a conference call.

Delays at two major factories due to start up in the coming months in the U.S. and Brazil will hurt the company's overall sales in 2012, the company said.

The company made losses on currency hedging contracts as the euro weakened, Mallet said. Vallourec typically sells in dollars, but has costs in euros.

Mallet expects an Ebitda margin of 15% for the full year; it was 12.7% in the first quarter.

Share closed up 1.5% at EUR42.87, while the index ended up 0.4%. The company reported its earnings after the stock market had closed.

-By Inti Landauro, Dow Jones Newswires; +33 1 4017 1740; inti.landauro@dowjones.com

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