Online travel group lastminute.com saw its share price tumble today after confirming that trading had been "challenging" over the summer.

The company said underlying earnings for the fourth quarter were likely to be at the lower end of forecasts of between £25 million and £30 million set out in August. Shares fell by as much as 6% after today's update.

It also gave details of how it would achieve "significant" cost savings across its businesses in the next financial year.

Lastminute said total cost savings would amount to £13 million in the 2005 financial year, helping underpin growth in earnings.

Chief executive Brent Hoberman said: "Despite continued challenging trading conditions in the industry during the summer quarter, we are pleased to see organic growth accelerate for the group."

The cost of achieving the cost savings would amount to £9 million including the previously announced exceptional item of £5 million relating to the integration of the newly-acquired Online Travel. The majority of these costs will be listed as exceptional items in the current quarter.

Lastminute said in August that underlying earnings for the full year would be between £26.7 million and £31.7 million, compared with £15 million in the previous year.

The company provides travel and leisure offers directly in 13 European countries and also has three international joint ventures. It currently employs around 2,400 people.