Shares in British aerospace manufacturer Rolls-Royce (LON:RR) dropped nearly 20 percent this morning after issuing its fourth profit warning in just over a year.
The company cited sharply weaker demand for spares and services for existing aero-engines and corporate jet aftermarket services as reasons for the results.
Rolls Royce said profit forecasts for the year would be 30 percent below a current consensus estimate – which was cut in July, after it announced that reduction in deliveries of its Trent 700 engine would affect profits in 2016 and 2017.
In a statement, the company said that profits in 2016 will be hit by £650m of “headwinds” as a result of “sharply weaker demand”.
Chief Executive Warren East, who was appointed in April and has been heading a structural review of the business, said:
“The speed and magnitude of change in some of our markets, which have historically performed well, has been significant and shows how sensitive parts of our business are to market conditions in the short-term.”
Rolls Royce are currently trading down 20.49 percent at 136.40 pence per share.