EADS said the 1.4 billion-euro charge, which was larger than expected, will hurt profits and the company junked profit forecasts. A revised guidance will be announced Thursday when third-quarter results are released, the company said.

Previously, EADS had projected earnings before interest and taxes at around 400 million euros ($579.2 million) this year.

There could be worse to come. In a statement, EADS warned again of "a risk of a further slippage of up to half a year."

Shares in European Aeronautic Defence & Space Co. NV sank 4.8 percent to 21.80 euros ($31.56) in Paris as the announcement reminded investors of recent troubles with the superjumbo A380, delivered last month to Singapore Airlines almost two years late.

EADS first announced a six-month delay to the A400M on Oct. 17, citing slow progress in engine development, but did not say then what the financial effect would be.

"Not only is the impact worse than we thought, but they are announcing the possibility of extra delays and extra charges," said Aurel-Leven analyst Harald Liberge-Dondoux.

"Even in the worst-case scenario, it will never be an A380 repeat in terms of financial impact, but there is a real fear that we are looking at a mini A380 scenario."

Liberge-Dondoux said he had calculated that the delays would cost 750 million euros, about half what EADS expects.

EADS said its calculations are not finalized but it expects to take charges of between 1.2 billion euros and 1.4 billion euros ($1.74 billion to $2.03 billion), of which more than 1 billion euros ($1.45 billion) is for Airbus.

The charges do not include "new potential issues" that could arise from flight testing, engine development and military systems, EADS said.

The A400M setback comes after multiple delays to the A380 caused by production snags, which wiped more than 4.8 billion euros ($6.95 billion) off EADS' profit forecast for 2006-2010.

Those delays have hurt more than just profits, prompting a major restructuring program with the loss of 10,000 jobs. The turmoil has dented Airbus' reputation and helped U.S. rival Boeing Co. sneak into the top sales spot in 2006.

Meanwhile, French lawmakers and Paris' financial market regulator are investigating possible insider trading in EADS shares prior to Airbus's public acknowledgment of problems with the A380 that sent shares tumbling 26 percent in June 2006.

The A400M program was launched in 2003 when 180 jets were ordered by seven NATO nations. South Africa and Malaysia have also placed orders, bringing the total to 192. The military plane had been scheduled to enter service in 2009.

Designed to carry up to 116 fully equipped troops, the hold is big enough to carry a variety of vehicles such as two attack helicopters, six Land Rovers or a Patriot missile system.

The engine is being made by a European consortium created to fend off competition from Pratt & Whitney Canada. It includes Rolls Royce PLC of Britain, Safran SA of France, MTU Aero Engines of Germany and Industria de Turbo Propulsores SA of Spain.