One of the UK's biggest engineering firms, GKN, has warned that full-year profits will only be slightly above last year.
The British aircraft and vehicle parts maker GKN has warned that legal claims and operational challenges in its aerospace division in North America would weigh on profits.
"Frankly this feels like walking down the street and being mugged", he said.
GKN also reported a "significant" reduction in profit margins at its aerospace business due to ongoing pricing pressures, continuing operational challenges and the impact of programme transitions.
Analysts on average had forecast profit to rise to 735 million pounds, Thomson Reuters data showed.
Shares were down by about seven per cent in early trading at 325p, leaving its market capitalisation about £450 million lower than it had been the previous day.
"One relates to GKN Aerospace and the other GKN Driveline".
Finance Director Adam Walker is due to leave in November.
GKN brought forward its trading update for the third quarter after being made aware of the two "probable claims".
It said the headwinds would not ease in the final quarter. "In addition, it is disappointing that we expect to have to provide for two unexpected claims which will slow our steady growth in profits", said Chief Executive Nigel Stein.
"In light of the trading performance in North American Aerospace, we are redoubling our efforts to improve our operational performance in that business, as well as developing actions to accelerate margin improvement plans across the group, including through the broader adoption of Industry 4.0". He said they were not litigation and did not expect them to be recurring.
Driveline continued to grow in sales ahead of global industry production rates that were up by 2.0%.
"Ultimately, we can not help but wonder whether this disappointment today will drive more significant change in due course".
GKN has been the subject of perennial talk that it could be broken up between its dominant automotive and aerospace units.