Sour not sweet is the verdict on Tate & Lyle as analysts got their red pens at the ready ahead of likely earnings downgrades. Shares tumbled 24% to 427p.

The sell-off followed a warning from the company that half-year results for for sugar substitute Splenda and ingredients businesses in the US and Europe are likely to be flat. Numis analyst Ian Kellett was preparing to slash his 2008 operating profit forecast by 10%.

'In our view this is the early signs of what we had expected: Sucralose is unlikely to remain a big profit driver of the group in the future,' said Kellett as he prepared to speak with management.

The analyst is clearly re-assessing his views on the business model as the firm also reported the sugars business would post a small loss: 'We have always disagreed with the group claim that profits have become more stable. It turns out commodity businesses are the big profit driver of the company.'

The weak greenback is expected to reduce sterling profits by £12 million, with Tate expecting a further currency hit in second half results. Among its other reasons for pessimism, Tate said significantly higher maize costs, if sustained, would have an increasingly severe effect on the profitability of its European ingredients division.

It warned that a ban on US corn gluten feed exports to the European Union had depressed by-product prices and margins. Tate said: 'Given the importance of these factors, the board views the near term outlook with caution.'