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Investing.com -- Shares in John Wood experienced a drop in early trade after the company announced a delay in publishing its results due to accounting issues in one of its business units.
This announcement also led to a temporary suspension of its shares.
The company’s shares fell by 13.04 pence, or 32.65%, to 26.90 pence. Originally, John Wood had planned to publish its financial results by April 30.
The UK-based energy-services company revealed on Monday that mismanagement within the projects business unit would necessitate adjustments to the profit and loss accounts, as well as the balance sheets for 2022, 2023 and the first half of 2024.
The company also anticipates material restatements for adjusted earnings before interest, taxes, depreciation and amortization, and adjusted earnings before interest and taxes for 2022 and 2023.
According to John Wood, there were significant weaknesses and failures in the financial culture of the projects business unit. These issues included inappropriate management pressure to maintain previously reported positions, over-optimism, and insufficient evidence supporting accounting judgments.
The company stated that these cultural failings likely resulted in the withholding of information and the provision of unreliable information to its auditors.
John Wood has expressed commitment to implementing a detailed remediation plan to strengthen its financial culture, governance, and controls. This plan will include actions on culture, controls, and organizational structure.
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