Leighton Shares Slide as It Fails to Provide Better Outlook

Submitted by Jim Thesiger on 18 May, 2010 - 07:26

Australia based project management and construction company Leighton Holdings (LEI) shares has dropped more than 7 percent on Monday after the company declared that it expected the full-year earnings of $600 million (minimum) and net profit worth of $400 million for nine months (till March 31st). It is to be mentioned that the numbers were almost double that of the last nine months- during a time when the Australian construction giant posted a $220 million worth of net profit. Leighton Holdings felt the heat due to not being able to come up with a better outlook for its businesses. Wal King, the chief executive of the company stated that strong performances in the infrastructure and mining businesses offset the difficulties that the company is facing in property business and in the Middle East. The Leighton chief executive said, the diversified business strategy helped his company to deal with the global economic melt down.

The company was closed at $2.46 at $32.18, losing 7.1 percent while the broader stock exchange saw a drop of 3.1 percent. Speculation is there that Mr. King- who is operating as the chief executive of the company for more than 40 years is going to step down from the post this year who is likely to be replaced by chief financial officer Peter Gregg- the ex-chief financial officer of Qantas. It is to be mentioned that Mr. Gregg replaced Scott Charlton, who was appointed as the operations director by Leighton rival Lend Lease. However, Mr. Gregg refused to make any comments regarding the speculation on Monday.

Leighton claimed that the fluctuations of the currency were to be blamed for the decline in its revenue which fell by as much as $400 million in comparison with the corresponding period. Leighton’s revenue expectations for the financial year 2009-10 went down slightly, touching $18.5 billion. During February, the company declared that it was looking forward for revenue of as much as $19 billion.