Investing.com – Engineering and construction company McDermott International slumped to a 15-year low on Tuesday after warning it would swing to an annual loss amid a lack of new business and customer wins.
The company cut its guidance, forecasting a $310 million net loss for the full year, compared with a previous forecast for a $170 million profit. McDermott (NYSE:MDR) plunged 37%.
The warning of a loss comes as revenue estimates for the year were trimmed to $9.5 billion from $10 billion, which the company blamed on several headwinds, including soft second-quarter results, a "slippage" in new business and customer changes on several projects and a shift in the expected timing of remaining incentives on the Cameron liquid natural gas project in Louisiana.
The second quarter was far from kind, with the company reporting a loss of $0.07 a share, compared with a profit of $0.28 a share a year earlier, confounding consensus estimate of a profit of $0.09 per share, according to Investing.com. Revenue of $2.14 billion, up from $1.74 billion a year earlier, also fell short of estimates of $2.26 billion.
In the earnings call that followed the quarterly results, the company expressed optimism that the benefits of its merger with Chicago Bridge & Iron, completed in May last year, would soon be realized and boost performance.
"We're not happy with the magnitude of the loss for the quarter which, to a certain degree, is extending the overall timing of our transition period, but we fully expect benefits of the combination to become more evident next year," said President and CEO David Dickson.
McDermott, long a player in constructing oil and gas production and related facilities, has been struggling with profits in the last few years. Tuesday's earnings warning basically wiped out this year's stock gains. The stock had been up as much as 67% for the year when it hit $10.95 on July 24. the stock has fallen about 75% since a January 2018 peak.