Shares in Genus slumped 11% after the livestock genetics company warned that, thanks to "difficult" US trading, it faced a drop in first half profits.

The company said that profits in the July-to-October period fell by 15% as a hit from financing charges added to damage from a "further deterioration" in US markets.

"As a result, the board expects first half [July-to-December] profits at constant currency to be lower than last year," Genus said.

The group also appeared to dim prospects for the sharp rebound in livestock markets – and its own hopes – that it forecast for the first six months of 2010.

The "extent" of the company's revival would "depend on the timing of market recovery", Genus said.

'Management credibility'

While some analysts had been prepared for a decline in first-half profits, the extent of the drop since July, and the tone of the statement, surprised investors.

Genus shares closed down 70p at 570p,

"It's about management credibility," one investor told Agrimoney.com.

"It appears that they may be changing their story. There might be some disappointment that they are not getting the growth people were expecting of them 18 months ago."

Expectation management 

At Astaire Securities, the City broker, analyst Mick Cooper said: "In the past Genus have managed expectations extremely well. They have tended to come in slightly ahead of forecasts.

"That has changed, albeit in conditions that are extremely challenging and difficult to predict."

Nonetheless, he said the shares remained a long-term buy.

At KBC, Charles Hall, who also rated the stock a buy, said Genus shares had retreated to an "attractive entry point".

"The pace of recovery is currently unclear, but Genus is well positioned to benefit from the potential improvement in agricultural markets," he said.

"The long-term prospects continue to be excellent given the significant growth potential in emerging markets, as well as the potential for technology breakthroughs."