Shares of Royal Mail /zigman2/quotes/204213037/delayed UK:RMG -0.56% dropped 8.4% as the company lowered its outlook for letter volumes in the next fiscal year by 1 percentage point to a decline between 7% and 9%, and said there's an increased likelihood that its U.K. parcels, international and letters arm will be loss making. Productivity in the current year is estimated to grow 2% versus previous guidance of 1.5%. Analysts at Bernstein Research said the company will have to choose between funding its transformation plan or its dividend, as the faster decline in letter volumes could take out between £25 million and £30 million per year in revenue and cash flow.
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