Shares in phone-book publisher Yell Group plunged 19.67% Tuesday after the company slashed revenue expectations for its U.S. operations in half.
The fall in FTSE-100 component Yell's shares is the biggest since the company began trading in July 2003 and wiped out about $1.6 billion from its market value.
Yell said U.S. sales will grow by just 3% in the fiscal year ending March 2008, blaming tougher competition. The company did not provide prior guidance, but the market was expecting U.S. revenues to rise by about 8% to 9%, Reuters reported.
In response, Goldman Sachs cut its rating on the stock to "neutral" from "buy," lowering its price target on the stock to 454 pence from 630 pence.
Also Active in European Trading:
BAE Systems (up 1.27%) Traders said there is talk of Saudi investors building a stake in the company, according to Reuters.
Bayer (up 2%) The German chemical and healthcare corporation together with BASF (up 0.15%) gained on the DAX, benefiting from Akzo Nobel's better-than-expected first-quarter profits and optimistic comments by traders about the pharmaceutical sector.
Verbund (up 2.15%) Austria's top utility beat forecasts, reporting a 12.1% rise in first-quarter operating profit, saying hedging offset weaker spot prices.
Aviva (up 2.26%) The British insurance company reported a 16% rise in life and pensions sales on Tuesday, attributed to its business in the U.S., AmerUs.
Slough Estates (up 2.65%) Traders told Reuters the British real-estate investment trust might make a takeover target of BritishLand.
Akzo Nobel (up 3.31%) The Dutch chemicals group reported better-than-expected first-quarter profit, which climbed by 18% to 219 million euros ($297.1 million).
Alcatel-Lucent (up 5.38%) Despite reporting “soft revenues” for the first-quarter, Alcatel-Lucent’s shares rose after it announced a deal with China Telecom’s subsidiary Shanghai Telecom in which it will provide premium IP-based services.
Grupo Inmocaral (down 11.48%) Spanish real-estate stocks fell on Tuesday, as the recent meltdown in the stock price of local real-estate company Astroc Mediterraneo resulted in a wide selloff, traders told Dow Jones Newswires.