Morrison Knudsen Corp. jolted the stock market yesterday with a double dose of bad news: Its 1994 losses are far larger than its recent pessimistic forecasts. And the giant construction company's acting chairman is quitting less than six weeks after he took the job.
The company's stock, already battered by predictions that the annual loss for last year would hit $174 million, lost more than one-quarter of its value yesterday morning when the company announced that its losses for the last year would actually total $310 million, by far the highest in the company's 83-year history.
The slump was compounded when the company announced that Acting Chairman William P. Clark was resigning to return to his consulting business. The stock, which fell to $6 before the market steadied in late afternoon, closed at $6.50, down $1.625.
The stock had traded for nearly $30 a share in April, before William Agee's six-year tenure as chief executive began to unravel. After a large, unexpected quarterly loss in June, Mr. Agee came under increasing pressure from the company's lenders and from a few dissident board members, led by Mr. Clark.
In February, as the losses continued to mount and the company's credibility eroded, Mr. Agee was forced to resign.
Mr. Clark took over immediately as acting chairman of the Boise, Idaho-based company, with a mandate to restore confidence. As the grandson of a Morrison Knudsen truck mechanic who had worked on the huge Boulder Dam project, he quickly won the affection of employees, who reacted to his resignation with what one staff member called "shock and anxiety."
But Mr. Clark, interviewed just after his departure was announced, explained that he felt he had accomplished the two major goals he had set for his emergency tenure -- the installation of a new management team and the full, credible disclosure of the company's financial condition.
Two weeks ago, the company named Robert A. Tinstman, a 20-year veteran of Morrison Knudsen's engineering operations, as its president and chief executive.
Mr. Clark said the company was able to inform its lenders Sunday night of the results of a thorough financial review of the company's major construction and mass-transit manufacturing contracts -- a review that prompted the company to slash its estimates of the value of many of the large-scale transit-car projects added during Mr. Agee's tenure.
The figures are unofficial until the release of the company's annual audit late this month or early next month, but Mr. Clark said he had confidence in the numbers.
He said he wants to return to "family and professional commitments that I had to set aside on an emergency basis starting the night Mr. Agee resigned."