CRH Plc warned of an end to years of uninterrupted profit growth as flagging economies in the United States, Britain and Ireland and a weak dollar take their toll on the building materials group.
Shares in Ireland's CRH, one of the world's biggest suppliers to builders, fell over ten percent.
"The ongoing negative economic developments and financial market pressures of recent months are having an impact on business sentiment leading to weaker demand," CRH said in a trading statement on Wednesday.
CRH, which last year made almost half of its 2.1 billion Euro ($3.3 billion) operating profit in the Americas, also said that at current levels the weak dollar would knock over 80 million Euro ($126 million) off the value of profits this year.
"CRH anticipates that full year 2008 reported profit before tax may show a high single digit percentage decline compared with the record 2007 out turn of 1.904 billion Euro," it said.
The drop in earnings per share would be less due to an share buy back programme and an expected lower tax charge, CRH said.
The Dublin based group, which has more than doubled profits since 2003, had in May indicated it would be difficult to meet its goal of growing profits for the 16th consecutive year, but had not at that stage given up on the possibility.
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Chief Executive Liam O'Mahony said on Wednesday the new guidance was its "best view at this stage".
"We probably felt it more prudent to anticipate there might be further challenges in the second half," O'Mahony told analysts on a conference call.
Shares in CRH were trading 10.2 percent lower at 15.54 Euro by 1136 GMT, under performing a 1.5 percent drop on the wider Irish market. Its London shares were 9.9 percent lower.
The stock had fallen over seven per cent on Tuesday after Credit Suisse gave a downbeat assessment of the sector and has now fallen almost 60 per cent from a lifetime high hit last July.
"The sector is likely to remain out of favour given the fact the global construction markets are likely to remain weak," Goodbody Stockbrokers analyst Robert Eason said in a note.
CRH said it expected to post a first half pre-tax profit of around 600 million Euro, compared with 670 million Euro in the same period a year earlier.
The group, which has used acquisitions to grow revenue from 26 million Euro in 1970 to almost 21 billion last year, said it had spent over 700 million Euro on takeovers and investments in the United States, Asia and Europe in the first half.
O'Mahony confirmed CRH had pulled out of bidding for German conglomerate Haniel's Xella unit. While the group continued to be active in acquisitions, he said its focus was on maintaining the performance of the existing business.
"We have the firepower and ability to make acquisitions. But we will not put our financial position in jeopardy."
CRH said it had intensified a cost reduction drive and expected its capital expenditure this year to be closer to 1 billion Euro against 1.2 to 1.3 billion Euro predicted previously, with "tighter" capex spending seen in 2009.
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