Its shares slid 7.6% to their lowest level since March, and the company was the biggest faller on the FTSE 100, the UK's main share index.
Operating profit before transformation costs for the six months to 25 September fell 5% to £320m from £342m.
Royal Mail is now seeking cost savings of £600m a year, up from a previous target of £500m.
Royal Mail reported a 1% rise in revenue to £4.6bn for the half year to 25 September, but analysts said this was lower than forecast.
The trend of fewer letters being sent through the post continued, with total letter revenues falling by 3%, although parcel revenues grew by 3%.
"The fall in the volume of letters and an 8% dip in marketing mail after the Brexit vote in June is causing concern about what can be assumed going forward," said David Kerstens, equity analyst at Jefferies.
He added that pension costs were set to rise sharply and that cost savings would be very hard to achieve without sacrificing quality of service.
Moya Greene, Royal Mail's chief executive. said the Christmas period would be crucial for the full-year results.
"Extensive planning, which began in the spring, will help us to manage our busiest time," she said. "This includes the recruitment of over 19,000 temporary staff and opening nine temporary parcel sort centres."
Also on Thursday, Royal Mail competitor UK Mail - which is being bought by Deutsche Post - said half-year revenues had fallen to £230m from £237m a year earlier, although pre-tax profits rose to £5.8m from £2.2m.

Philip Craig, 38, killed Christopher Laskaris, 24, at his flat in the Hyde Park area of Leeds in November.
Craig, from Leeds, then went back to the flat in St John's Close, where his victim's body remained, to take more possessions.
He was jailed for life with a minimum of 25 years at Leeds Crown Court.
Craig pleaded guilty to burglary at a previous hearing for which he was sentenced to three years, to be served concurrently.
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The court heard Mr Laskaris, who had Asperger's Syndrome and suffered from bi-polar disorder, died from a single stab wound to the heart on 4 November.
His body was not discovered until 17 November, by which time Craig had gone back to the flat to steal items including a TV, games console and a number of guitars.
Jailing Craig, Mr Justice Goss said: "It is clear from the evidence that his difficulties made him vulnerable and he lacked insight in to his vulnerability.
"You preyed on this and saw him as someone you could use to your advantage by supplying him with drugs.
"When you left his flat he was dead or dying.
"You subsequently returned and moved his body, by which time you must have known he was dead, turned his trouser pockets out and helped yourself to such of his property that you considered of value and which you sold.
"His difficulties in life were not of his making; he needed help and support, not exploitation and abuse."
In a statement, Mr Laskaris' family said his death had had a "devastating impact".
"We are relieved that justice has been done, but nothing can ever heal our pain and loss, which we will have to live with for the rest of our lives," the family said.
"A bright young man has been robbed of his future, and this has had a devastating impact on his friends and family."
The case against a second man - Dempsey Pattison, 22, from Leeds, - who was also charged with murdering Mr Laskaris was discharged in February.
Royal Mail shares have fallen after the company reported lower profits and increased its target for cost savings.
[NEXT_CONCEPT]
A drug dealer who stabbed a man to death in his own home and then returned days later to burgle the property has been convicted of murder.