McDermott (MDR) - Get Report shares continued to fall Thursday, tumbling 23% to $1.67, following reports that the engineering and construction company engaged a turnaround consultant in an effort to improve its cash flow and bottom line.
A Wall Street Journal report Wednesday said the Houston company engaged AlixPartners of New York, which has advised some of the largest Chapter 11 reorganizations, including General Motors (GM) - Get Report , Kmart, and Enron.
Wednesday's selloff was so fast that trading in McDermott shares was halted twice before 10 a.m. and the stock finished down 63% at $2.16. The low for the day was $1.44, down 76%. The stock has not been below $2 since December 2002.
McDermott said in a statement that it "routinely hires external advisers to evaluate opportunities for the company," and that it "is taking positive and proactive measures to improve its capital structure and the long-term health of its balance sheet."
In July, McDermott updated its outlook to show a net loss of $310 million on revenue of $9.5 billion. Its previous outlook had been a profit of about $170 million on revenue of $10 billion.
The change in the guidance reflected the weaker-than-expected second-quarter results; reduced revenue and higher expense due to "slippage in certain new awards" and customer changes to the schedule on several projects; changed assumptions about certain legacy projects, and a move, to 2020 from Q4 2019, of incentives on an LNG project, the company said.
Part of those projected losses are being attributed to a $6 billion deal last year to buy rival engineering, procurement and construction company Chicago Bridge & Iron, Bloomberg reported.