Rolls-Royce has issued its third profit warning in just over a year, blaming lower oil prices and weaker demand for some of its aircraft engines.
Rolls last issued a profit warning in February, claiming the sharp fall in oil prices had “increased uncertainty for many of our markets and customers”.
It had previously said its 2015 profit would be between £1.4bn and £1.5bn.
But on Monday, the engineering firm lowered its profit outlook again, this time to between £1.325bn and £12.475bn.
The engineering and aerospace firm had originally said profit in 2015 would be flat to 3% lower, when it surprised investors last year by issuing its first profit warning in a decade.
In the end, underlying pre-tax profits in 2014 fell 8% to £1.62bn, roughly in line with expectations.
Rolls also said it would halt its £1bn share buyback – of which it had completed £500m – as a result of falling profits.
Rolls-Royce said lower demand and pricing for its Trent 700 engines and reduced demand for its business jet engines would hit profits by £300m.
“I am clearly disappointed by today’s announcement and the impact this will have on our investors and employees,” said Rolls-Royce chief executive Warren East.
“Notwithstanding the market developments, it is our responsibility to build a business that is sustainable and resilient, no matter what is thrown at us, and this will be my fundamental priority for the next few years.”
Mr East joined Rolls-Royce as chief executive earlier this year from microchip manufacturer Arm Holdings, replacing John Rishton, who announced his retirement after a difficult four years in charge of the 131-year-old company.