Aveva (LON:AVV) shed almost a quarter of its value Friday as the engineering technology company issued a surprise profit warning.
In a trading update the company, which makes software for designing oil rigs, ships, and chemical plants, said revenue for the first half of its year will probably be lower than expected at between £84-90 mln.
Aveva blamed weaker demand in South America and parts of Asia and also currency fluctuations and the timing of contracts.
Shares plunged 23% lower to 1672p, valuing the company at £1.06bln.
In May, the company said it was confident about its prospects as it reported a 16% increase in pre-tax profit.
Aveva hasn’t given new earnings guidance for the year but Julian Yates, an analyst at Investec, reckons that the company will reduce its earnings guidance for its 2015 financial year by 15%.
Yates said that although the profit warning was disappointing Aveva’s business model is “solid”.
“[We] do not see this downgrade as a start of a business heading into a downward spiral,” Yates wrote in a research note, though he added his recommendation on Aveva “under review”.