NEW YORK — Shares of Chemec Corporation (NASDAQ:CHEM) plunged 31% Friday after the water infrastructure company reported disappointing second-quarter results and gave weak guidance.
Chemec reported a second-quarter adjusted loss of $1.60 per share, well above analysts’ expectations of $0.12 per share. Revenue was $91 million, well below the consensus estimate of $175.65 million.
The company’s results were negatively impacted by a net loss of $30 million due to the settlement of an old project, which included a $23 million decrease in revenue. Excluding this impact, Shimmick Projects’ revenue was $84 million in the second quarter, down from $103 million in the year-ago quarter.
“With the progress of our transformation plan, the previously announced sale of the foundation business assets, the re-lease of the equipment yard, and the settlement of the legacy loss project claim, we have made progress toward a more capital-light business and focused on capturing the growth opportunity in California’s critical water and infrastructure market,” said CEO Steve Richards.
For fiscal 2024, Shimmick now expects Shimmick Projects revenue to remain broadly flat year-over-year with a gross margin of 4% to 9%. The company also expects Legacy Projects revenue to be between $55% and $65 million with a negative gross margin of 80% to 90%.
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