Shares in Stagecoach fell by more than 40% on Wednesday after the bus and rail operator gave a warning about profits at its US business.

Stagecoach said that profits at its Coach USA unit would be �20-30m ($31-46m) lower than the previous year.

While the group said that all of its other divisions continued to trade profitably, the statement failed to calm investors.

Stagecoach shares closed down 10.75 pence, or 43%, at 13.75p.

Even before Wednesday's trading statement, shares in Stagecoach had fallen 70% from its 2002 high of 81p as investors worried about the US business.

In July, Stagecoach said a "disappointing" performance from Coach USA had contributed to a fall in its annual profits.

US revenues down

Stagecoach, based in Perth, Scotland, said trading at its Coach USA business remained "difficult" because of the weak US economy and increasing competition.

South West Trains has seen season ticket revenues fall

Underlying revenues for the five months to 30 September were down 7.2% on last year.

Lower revenues were seen at its charter, sightseeing and tour operations, and also at its taxi division.

September and October are traditionally strong months for Coach USA, although business last year was hit by the 11 September attacks.

"The year on year improvement in revenues for September was less than expected," said Stagecoach in its trading update.

"We do not believe that trading conditions will improve significantly during the remainder of the year."

Train revenue flat

Stagecoach said the slowdown in London's job market had hit season ticket revenues at its South West Trains operation.

Passenger numbers had risen 0.5% although this was down to more people travelling at off-peak times when fares are cheaper.

Overall revenues at South West Trains were down 0.6% on the same period last year.

At Virgin Rail Group, which is 49% owned by Stagecoach, revenues were up 14% on last year.

Stagecoach said its bus business was helped by higher revenue and passenger numbers in London, and revenues were up 4%.