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Hydro issues profit warning

Oil and industrial concern Norsk Hydro warned investors Tuesday that its third-quarter results would be hit by heavy exploration costs. Hydro's stock took a dive on the news. Hydro said earnings would be hammered by NOK 1.3 billion in costs attributed to drilling in the Gulf of Mexico that didn't result in any oil strikes. Hydro also said it has "reevaluated" its outlook for a drilling block off the coast of Angola. A project in the Danish sector of the North Sea also has been a disappointment for Hydro, the company said. The high costs overseas along with high taxes paid on oil revenues in Norway will have a negative impact on earnings. Hydro also warned it faces an unrealized currency exchange loss of some NOK 380 million tied to a company in Brazil. Results in its aluminum division also have been hit by a fall in prices during the quarter. Hydro's share price tumbled on the news, falling to NOK 286 from Monday's close of NOK 298.50. It later recovered and was trading at around NOK 296 by mid-afternoon. Hydro is due to release its third-quarter results on October 21.