Rolls Royce (RYCEY) stock price took a hit on Thursday following a warning from CEO Warren East.
East, who became the CEO of Rolls Royce in July, said there are issues with the company that he wasn’t aware of when he took over. He said that profits are going down and that there doesn’t seem to be a quick way to recover. He doesn’t expect the company to recover until 2017, reports Bloomberg.
The CEO of Rolls Royce is also said that the company is reviewing its dividends. He’s looking to restructure the company, but warns that the transition will be painful. One analysts believes the stock could drop as much as 80%, Bloomberg notes.
“Some bad news on profits has probably arrived today rather than over a period of years,” analysts at Jefferies told The Guardian. “The relatively robust 2016 cash flow is some solace and likewise the new management team stamping its authority on things through a more profound restructuring.”
RYCEY shares were down 19% as of Thursday afternoon.
More From InvestorPlace:
