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Downer (DOW) $3.82

DOW -20.42%: The contractor came clean this morning about an accounting issue, having incorrectly recognised revenue from a long-term, maintenance contract to the tune of $40m. As a result, they cut FY earnings guidance by $8-10m and had to explain away issues with their internal systems that led to the embarrassing mess. While it will have no cash impact as it’s just early recognition of revenue that will eventually be completed and paid for, it’s a really bad look + it shows the chasm between reported profit and actual cash. In any case, the share price decline of ~30% was an overreaction this morning with the stock closing ~10% up from the lows.

MM has no interest in DOW, not just a result of today’s debacle
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Downer (DOW)
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