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The Rolls-Royce Holdings LC logo is displayed on the company's new facility in Singapore, in this file photo.Munshi Ahmed/Bloomberg

Rolls-Royce Holdings PLC Chief Executive Officer Warren East put the engine maker's troubles under a spotlight on his second day in the job, drawing a line under his predecessor's more cautious approach to updating investors.

East halted a share buyback to preserve dwindling cash and said full-year pretax profit will be between 1.3 billion pounds ($2-billion U.S.) and 1.47 billion pounds, compared with a previous estimate of as much as 1.55 billion pounds. The announcement Monday prompted the stock's biggest fall in 8 1/2 months.

"It's not how I envisioned my first communication with the market," East said on an investor call. "And up until last week or so I hadn't really imagined that we would be talking quite so soon in my tenure. But It's absolutely inevitable."

East, who took over Friday, moved to differentiate himself from former CEO John Rishton, lambasted for dragging his feet when flagging a series of outlook revisions during four years in the role. The new chief is grappling with sluggish marine-engine sales and a fall-off in demand for A330 jetliner engines that's set to hurt earnings in 2016 and 2017 at least.

Shares of Rolls-Royce traded 9.5 per cent lower at 775.50 pence as of 10:012 a.m. in London after earlier slumping as much as 9.9 per cent, their biggest drop since Oct. 17 last year, when the company said sales would fall. Before today, the stock had lost about 1.5 per cent in value this year, halting a decline that wiped out almost a third of its value in 2014.

New-Man Risk

"It's known as the 'new-man risk,'" said Zafar Khan, an analyst at Societe Generale in London. "The new CEO has been in the job only for days, so some people had been thinking he'd want to cut expectations."

East, an engineer who has worked in the semiconductor industry, halted a 1 billion-pound share buyback at the halfway mark, citing free cash flow for 2015 he estimates will be in the range of plus or minus 150 million pounds, down from as much as 350 million pounds under earlir guidance.

The new CEO has ordered a restructuring at the marine unit, which has suffered as the slumping oil price prompts customers in the offshore industry to buy less equipment.

East, 53, said he'll also review the U.K. company's wider operations with "a greater degree of vigor" and provide an update with a half-year earnings report on July 30.

The jet-engine arm, Rolls-Royce's largest by revenue, has seen demand for turbines to power Airbus Group SE's A330 wide– body airliner decline ahead of a transition to an upgraded version, Chief Financial Officer David Smith said on the call.

Production Cut

Rolls's Trent 700 is one of three engine choices on the A330, though the U.K. company has won more than three-quarters of competitions in recent years and has negotiated exclusivity for its new Trent 7000 model on the upgraded A330neo.

Airbus is cutting monthly production of the A330 from 10 a month to six because of sluggish demand ahead of the switch to the more efficient successor.

The A330 setback, combined with lower-than-expected demand for engines to power business jets and a softening spares and replacement market in regional planes, will wipe 300 million pounds from earnings at the aero-engine business in 2016. There'll be a similar impact in 2017, indicating "a couple of difficult years" before a ramp up in output of the XWB used on Airbus's newest A350 wide-body takes hold, CFO Smith said.

The drop in cash-flow stems from lower revenue at the marine unit as lower oil prices make it harder to secure advance deposits from customers, he said. The business has a "pretty comprehensive" revamp plan, which will lead to one-off charge of as much as 100 million pounds for the full-year, he said.

Rishton, East's forerunner, stepped down after numerous profit revisions, coming under fire from in his final months over what was perceived as poor communication of guidance. An earnings review ahead of today's revisions was concluded only over the weekend, the new CEO said.

"We're bringing this news to the market now a little earlier than you might have expected to see from Rolls-Royce in the past," East said.

–With assistance from Andrea Rothman in Toulouse.