The former Transfield boss's sudden exit two years into his term as HWE chief comes as the company ended a four-day sharetrading suspension with an announcement that its full-year profit expectations have been slashed.
An announcement from HWE said the parting was amicable, but the company said it had added a $16 million provision for project losses as a significant item in its December half-year accounts.
Despite a strong order book with $3.8 billion of work at hand, HWE said it was suffering from a slow uptake of new work in the newly formed engineering projects business.
The company now expects to break even or post a small loss for the year to June 2005.
Bob Cleary, who headed uranium miner Energy Resources of Australia until February this year, has been appointed interim chief executive officer while the company looks for a permanent replacement.
Euroz Securities analyst Steve Suleski told CEN that despite the share price going up along with HWE management's recent bullish forecasts, it had remained a "high-risk situation".
"The market has been waiting for HWE to turnaround for two years now, just when they are through it, they raise money, they've got the growth, the resource sector is looking strong, and it (the company) has relapsed," he said.
"They had very optimistic forecasts, but the catch was there wasn't a lot of margin for error. The huge growth in the order book came with huge capital expenditure requirements and when you spend that much on capital you also have funding requirements and you need to generate the profits as well.
"They have stretched themselves to capture some of the strong market, and whether they are overstretched I don't know, because we are not sure how bad these (problem) contracts are, how quarantined they are, how fixable they are."
HWE had not announced details of the troubled projects, and investors would be waiting for the appointment of a new CEO to see the direction in which the company was headed, Suleski said.
"I'm not sure what will happen to the share price other than it will be volatile and certainly will stay weak for a while," he said. "There is no CEO and there is not a lot of confidence in their internal information systems. We don't know how tight the cash is. I'd expect that things will remain tight until a few more questions are answered."
HWE management was still confident of a turnaround, chairman Neville Walker said. "Although a significant setback, it is important to remember what we have achieved over the past two years in rebuilding the group and the strong foundation that we have laid for future growth given our current order book," he said. "While the losses are entirely unacceptable, we have implemented appropriate management action."