Shares of CB&I take ride downhill

The stock of CB&I plummeted by more than 30 percent Thursday morning after The Woodlands construction and engineeering firm said it would suspend its dividend and sell off its technology business as part of strategy to stave off bankruptcy.

The stock recovered a bit before the market closed but still ended the trading day down 27 percent, falling to $11.97 a share from $16.33. CB&I specializes in energy projects, and in 2014, at the height of the last oil boom, its stock peaked at about $87 a share.

After the market closed Wednesday, CB&I issued a dismal earnings report, disclosing a $425 million loss in the second quarter on top of a 40 percent dive in revenue from the second quarter of 2016.

CB&I said it hopes to sell its technology business, which includes patents and licensing agreements, for more than $2 billion by year-end, in an effort to wipe out most of its

$1.8 billion in debt. The company also suspended the dividend of 7 cents per share each quarter, which is expected to save CB&I $30 million a year.

CB&I’s goal is to become a smaller, more focused engineering, construction and fabrication company geared toward the liquefied natural gas, petrochemical, refining and gas power generation sectors, CEO Patrick Mullen said. An undetermined number of layoffs are forthcoming, he added.

Mullen, the former chief operating officer, became CEO in July after longtime chief executive Philip Asherman retired.

“We’ve learned from these mistakes as we move forward. I know we have a lot to prove. My words are just a start,” Mullen said Wednesday. “The key here is that we have a plan.”

CB&I peaked at about 56,000 workers worldwide in 2014 at the height of the oil boom after it nearly doubled in size through the $3 billion acquisition of a competitor, the Shaw Group, of Baton Rouge, La. But that move proved poorly timed as the oil bust got underway. CB&I’s earnings were also dragged down by Shaw’s nuclear construction business, which CB&I has since sold.

CB&I now employs about 32,000, but the number will shrink with the sale of the technology business and its plans to cut another $100 million in annual costs.

“We’ve learned from these mistakes as we move forward. I know we have a lot to prove.” CB&I CEO Patrick Mullen