Slump in oil price hits WOR

WOR is one of the biggest firms of engineering consultants on the globe. Their prime focus/expertise is design and construction of huge projects related to energy (oil&gas) and resources eg metals and minerals. A few yrs ago their SP touched $50. But as projects became less and competition grew the SP slid.

Then 11 months ago POO started a sharp fall culminating in WTI crude going below $50! Almost nobody saw that coming. Since Feb WTI has risen to $64 and Brent even higher. But damage has been done and numerous projects have been postponed/cancelled etc. Over past few months WOR has issued two downgrades and intend to focus more on management/maintenance of sites rather than construction. Large redundancy costs have hurt their bottom line.

Now WTI has slumped again and sitting at around $56.50 mark. No new oil&gas projects are being built. Hence, no light at end of tunnel for WOR and other consulting engineers. Expect final div to be cut sharply and a poor outlook statement in the yr end result mid August. Avoid until macro improves.