The engineering firm Rolls-Royce said 2015 profits would be at the lower end of estimates in an update on its performance on Thursday.
Shares immediately tanked, and they were down by more than 18% as of 8:42 a.m. UK time.
The company had previously set profit guidance for 2015 at £1.325 billion to £1.475 billion ($2 billion to $2.24 billion).
The picture looks even worse for next year, with profits in 2016 hit by £650 million of headwinds — lower demand for its services.
CEO Warren East said: "While 2015 remains broadly as expected, the outlook for 2016 is very challenging."
"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," he said.
Rolls-Royce said it would seek cost savings of up to £250 million every year, taking effect from 2017, and signalled it could change its shareholder dividend policy.
Investors fled. Here's what that looks like:
Rolls-Royce has been hit by low oil prices and a drop in investment in the energy industry. The company said in September it would slash 400 jobs from its marine division, after it cut 600 factory jobs earlier this year. The new round of layoffs will reportedly hit factory managers.
Rolls-Royce is struggling. Investors are concerned that a strategy to diversify away from making aircraft engines isn't paying off.
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