IRVINE — Fluor Corp. stock continued to retreat Wednesday, a day after the company said it expects to post a second-quarter loss of $70 million because of cost overruns at some power projects and for restructuring.
The stock, which tumbled $6.125 a share in the last 30 minutes of the trading day Tuesday, dropped another $2 Wednesday in heavy trading, closing at $48 on the New York Stock Exchange.
Although the construction and engineering company has outlined plans to cut overhead expenses and return its Fluor Daniel unit to profitability, most analysts said the outlook for the company will remain cloudy until management proves it can indeed turn the business around.
"Management needs to show investors that they can . . . return to the growth the company had been generating over the past five to six years," UBS Securities Inc. analyst Michael Dudas said.
Yet at least one analyst, Robert Toomey of Piper Jaffray Inc., believes investors are wrong to sell Fluor's stock now. "The Street is being exceedingly shortsighted," Toomey said. "The market's reaction is totally incorrect because they have stated their problems and basically bared their soul to the Street and are taking steps to correct it."