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Warning sinks Gillette
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June 18, 1999: 10:47 a.m. ET
Consumer products firm's stock off 10 percent early after gloomy prediction
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NEW YORK (CNNfn) - Gillette Co. shares slid more than 10 percent in early trading Friday on news the company expects second quarter earnings to fall by roughly 20 percent.
Investors immediately shaved 5-9/16 off the consumer product company's stock, taking it down to 41-3/4, in response to the profit warning issued after the bell Thursday. In addition to missing the 33 cents per share it earned during the 1998 second quarter by roughly 20 percent, Gillette also expects to report a low single-digit percentage increase in sales.
Wall Street analysts had expected a second quarter profit of 29 cents per share. Gillette also missed analysts' first quarter projections of 25 cents per share by a penny.
Gillette (G) officials blamed weak international economic conditions for the shortfall, particularly in the company's Braun, stationery and toiletries businesses.
The company, the world's largest maker of razors and blades and a top holding of investment guru Warren Buffett, earns roughly 60 percent of its income from outside the United States.
Separately, the company's board of directors announced it was expanding a previous stock repurchase program to 75 million shares from 50 million, but that didn't keep at least two investment banks -- J.P. Morgan and Donaldson, Lufkin and Jenrette -- from cutting the company's stock ratings Friday morning.
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Gillette Co.
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