Shares in Forge Group have dropped another eight per cent following more bad news from the engineering company, which now says it expects to post a full-year loss of up to $25 million.

Having flagged full year earnings of between $45 million and $50 million in December, Forge now says it expects to post a loss of between $20 million and $25 million for the 2013/14 financial year.

Forge shares were released from a two-session trading halt following the release of the revised earnings outlook and quickly slumped as much as 16 per cent.

By 1525 AEDT, they had recovered somewhat, to be 7.25 cents lower, at 82.75 cents.

The earnings downgrade is the latest in a string of negative announcements from the company, starting in December when it took writedowns of $127 million associated with its Diamantina Power Station and West Angelas Power Station projects.

That announcement saw the share price dive 84 per cent in one day.

Forge spooked investors again in mid January with a further writedown of up to $28 million on the West Angelas project, which sparked another 22 per cent slide in the share price.

On Wednesday, Forge said the latest writedown was partly the result of lower profit margins as the company focuses on generating cash flow to allow it to complete some major projects.

Chief executive David Simpson also said the company was working to close out its power station projects before the start of the next financial year, which meant Forge had focused less on booking new projects.

“The management team is very focused on completing the Diamantina Power Station and West Angelas Power Station projects as quickly as possible so the company is better positioned for a stronger performance in FY2015,” he said.

Forge also flagged a possible capital raising and said it had appointed Euroz Securities as corporate advisors to manage approaches to the company from third parties.