Telecoms group Cable & Wireless says it expects annual revenues at its core Global networking division to fall 10 per cent and has cut its estimate for the unit's underlying profit margin.
Shares in C&W, now the world's largest web-hosting company, fell three per cent to a new 10-year low of 221 pence in early London trade today following the release of a trading update which had not been expected until next month.
C&W shares have been under pressure recently as investor concerns about the company's accounting practices compounded the woes of a deeply troubled telecoms market.
The company blamed "continuing difficult market conditions" for the expected drop in C&W Global's sales, and cut its forecast for its second half core earnings margin by two percentage points.
The bottom has fallen out of prices for wholesale telecoms capacity as the Internet bubble burst and an expected surge in demand driven by "new" economic growth failed to materialise.
It said its other division, C&W Regional, was expected to deliver good revenue growth in the second half with gross margins over 40 per cent and strong cashflow. The largely Caribbean-based division accounts for about a quarter of group turnover.
The group said it had made excellent progress in the integration of Exodus, bought at the end of November, with its Digital Island and own brand managed hosting businesses.