Worley Ltd (ASX: WOR) shares are on the slide on Monday morning.
At the time of writing, the ASX 200 stock is down 5% to $11.23.
This compares to the S&P/ASX 200 Index (ASX: XJO), which is down 0.55% in early trade.
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Why is this ASX 200 stock falling today?
The global professional services company's shares are under pressure today following the release of an update on the impact of the Middle East conflict on its operations and outlook.
According to the release, Worley expects the ongoing conflict to have a negative impact on its FY 2026 earnings, with underlying EBITA expected to be reduced by between $30 million and $40 million.
Management highlighted that while there have been no project cancellations to date, the conflict is causing widespread disruption.
This includes delays to existing projects as well as slower commencement and awarding of new work in the region.
The ASX 200 stock noted that customers are delaying decisions due to uncertainty, while some projects have been impacted by supply chain challenges and safety-related disruptions.
The impact is not limited to the Middle East. The company advised that delays are also affecting services provided from its global offices that support projects in the region.
Growth expectations downgraded
Worley has indicated that it is now unlikely to achieve growth in underlying EBITA in FY 2026.
This represents a step back from its previous expectations and appears to be a key reason for the share price weakness.
However, the company did reiterate that it expects its underlying EBITA margin, excluding procurement, to remain within the range of 9% to 9.5%.
It also continues to target higher aggregate revenue compared to FY 2025, suggesting that while profitability is being impacted, top-line growth may still be achieved.
Ongoing uncertainty
Worley warned that its outlook remains uncertain and will depend heavily on how the situation in the Middle East evolves.
Factors such as the duration of the conflict, supply chain disruptions, contract timing, and the pace of recovery are all expected to influence performance.
Despite these challenges, the company said it continues to work closely with customers to minimise disruption and maintain project progress where possible.
Potential longer-term opportunities
Looking beyond the near-term headwinds, the ASX 200 stock pointed to potential opportunities arising from the situation.
These include increased investment in energy infrastructure and a greater global focus on energy security, which could support demand for its services over time.
The company also noted that it has been asked to assist with restoration and rebuild efforts linked to the conflict, which may provide additional work in the future.
A further update is expected when the ASX 200 stock holds its investor day next month.
