(Adds details from statement, background) Jan 15 (Reuters) - Babcock shares plunged almost 20% on Friday after the British engineer said it was reviewing the profitability of its contracts and its finances might take a hit as a result. It said the review was being supported by an independent accounting firm and the results would be assessed by its auditor PwC, audit committee and board before its annual results announcement, expected in May. It did not say what led it to launch the review, but added the results could affect either just the current financial year or potentially also future years. Babcock brought in a new CEO and finance chief last year as it dealt with a slowdown in most of its markets due to the COVID-19 crisis and higher costs related to that. For the first nine months of the current financial year, underlying operating profit slumped to 202 million pounds ($276 million) from 320 million pounds a year earlier, it said. Its order book at the end of 2020 was 16.8 billion pounds versus 17.6 billion pounds at the end of March. “Trading in the third quarter saw a continuation of trends in the first half of the year, with weakness in our civil aviation businesses and a negative impact from COVID-19,” Babcock said. The company has contracts in the aerospace, defence, emergency services and civil nuclear sectors and counts Britain’s Ministry of Defence as its biggest customer. JP Morgan analysts, who have a “neutral” rating on the stock, cut their earnings estimate for the company for the current and next two financial years by as much as 9%. “Q4 21 (Jan-Mar 2021) looks very challenging, as the latest wave of COVID-19 is having a bigger impact than we thought,” they wrote in a note.