U.S.

Clean Sweep At Procter & Gamble

By CBSNews.com staff CBSNews.com staff

June 8, 2000 / 1:25 PM EDT / CBS

The head of soap-maker Procter & Gamble Co. abruptly threw in the towel Thursday, saying he is stepping down from the company, which has been dogged by disappointing earnings. Its stock price fell.

Durk Jager, who holds the three top jobs at the consumer products giant, said he would retire effective July 1 after 30 years with the company.

Immediately after a market-opening conference call, shares of Procter & Gamble were down 3, or 4.8 percent, to 58 7/8. A component of the Dow Jones industrial average, Procter & Gamble dragged the blue chips lower in morning trading.

Shares of the company fell 1/4 to 62 7/8 Wednesday ahead of the news.

Procter & Gamble blamed lower volume growth for profit slowdown. This is the second earnings warnings the maker of Tide, Pampers and Pringles has made since announcing a major restructuring a year ago.

The consumer products giant said it'll earn about 55 cents per share in its fiscal fourth quarter, flat with the year-ago period.

The estimate is 9 cents below the current Wall Street estimate of 64 cents per share, according to a survey of analysts by First Call.

"This reflects lower volume growth, now estimated to be up one to 2 percent vs. year-ago, reflecting competitive pressures and reduced marketing support on several key businesses, including fabric and home care," the company said in a statement.

Jager will leave as chairman, president and chief executive officer, the company said. He's retiring on July 1 after 30 years of service. He had only been in the top job for a year.

The board elected Alan G. Lafley, currently president-global beauty care of North America, to be president, chief executive and director, effective immediately.

"I have great confidence in P&G and our prospects for delivering top and bottom line growth," Lafley said in a statement. "As a result, we didn't make enough tough choices to balance top and bottom line growth. The transition that we expected to take about a year to complete is clearly going to take a year longer. I'm confident we know what we need to fix and how to do it."

Shares of Procter & Gamble fell sharply in March after it warned of lower third quarter earnings. In April, it posted third-quarter net income that was 28 percent lower than the year-ago period.