(Adds CEO, analyst comments; updates shares)
Feb 18 (Reuters) - Fluor Corp shares slumped about 27% to a near 17-year low on Tuesday after the engineering and construction firm disclosed a probe by the U.S. Securities and Exchange Commission (SEC) and reduced its asset sales plan.
The company said the securities regulator is investigating its accounting and financial reports for potential errors, adding that it does not expect to file its annual report by the end of February.
The SEC has requested documents and information related to projects for which the company recorded charges in the second quarter of 2019, Fluor said.
The over 100-year-old company, which replaced its top executives in May, said it is conducting an internal review and has not determined as to whether there are material errors in its financial statements, although such possibility remains.
Fluor expects 2020 to be a transition year as it works off some of the problem projects and expects to see progress through the year, Chief Executive Officer Carlos Hernandez said in a conference call with analysts.
The company said it had abandoned plans to sell its government unit, while moving ahead with plans to divest its construction equipment rental company AMECO.
In September, the company announced plans to sell the two businesses while exploring options for its real estate assets.
Fluor remains on track to sell AMECO and has made significant progress with one or more potential buyers by the end of its second quarter, the company said on Tuesday.
This quarter will be a significant blow to the new management team as investors were hoping the worst was behind the company, Credit Suisse analysts wrote in a note.
Fluor said on Tuesday it expects to achieve by the fourth quarter the already announced target of $100 million in annual savings.
The company projected adjusted profit of between $1.40 and $1.60 per share from continuing operations in 2020.
Shares were down 24% at $14.88 in late morning trading.
Reporting by Shanti S Nair in Bengaluru; Additional reporting by Nishara Karuvalli Pathikkal; Editing by Subhranshu Sahu and Sriraj Kalluvila