Shares of Tetra Tech Inc. are falling sharply in premarket trading Wednesday, a day after the consulting and engineering services company said that it expects a loss in its fiscal third quarter as it absorbs about $95 million in charges.
Due to weak demand, it is cutting the size of its eastern Canadian and mining operations. The company will also take up to $45 million in charges related to project claims that it has disputed. The claims stem from change orders for U.S. government customers that are under pressure to cut budgets.
Brean Capital analyst Michael Gaugler said in a note to clients that Tetra Tech's new outlook means "it will be several quarters before the company regains its footing in terms of overall profitability."
Gaugler downgraded Tetra Tech's stock rating to "Hold" from "Buy."
Tetra Tech did not immediately return an emailed request for comment.
Shares of Tetra Tech fell $3.73, or 14 percent, to $23 in trading before the stock market opened Wednesday. Shares have traded between $23.79 and $31.49 in the past 52-weeks.