Osram, a leading global lighting company, lowered its income forecast for the year in the face of rapidly dropping demand for traditional light bulbs worldwide.

Revenue will be flat, or at best represent a moderate increase over last year, according to a company statement.

Shares fell Wednesday by 10 percent on the news. It is the largest drop since they began trading last July after Osram was spun off from Siemens AG.

Last month the company hinted a sales growth target of 3 percent for the year was proving more challenging then expected.

In its fiscal year that ended last September, the company reported sales of 5.3 billion euros ($7.2 billion) and profits of 33.6 million euros.

Cheaper LEDs in Asia

Munich-based Osram is moving into the growing market for light-emitting diodes (LEDs), but is being hammered by cheaper producers in Asia, including Samsung and Toshiba.

Traditional lighting products make up 66 percent of income from Osram's lamps and components division.

Osram opened an LED factory in Wuxi, China, earlier this month to exploit that country's fast growing market for semi-conductor based lighting products.

kpc/cjc (Reuters, Bloomberg, Osram)