Gillette Warns of Earnings Decline
BOSTON (AP) _ Gillette’s troubles appear to be continuing as the company announced Thursday it expects to report a 20 percent decrease in second quarter earnings per share compared with a year ago, falling well short of analysts’ expectations.
The Boston-based consumer products company attributed the earnings drop to slower-than-anticipated recovery in Japan, Brazil, Russia and Germany.
Sales for Gillette’s Braun appliance, stationery and toiletries businesses also were disappointing, the company said.
Nevertheless, ``we still expect sales to be up in a low single-digit increase,″ said Stephen Brayton, company spokesman.
Earnings will return to normal levels in the second half, Brayton said.
For the second quarter 1998, Gillette earned $372 million, or 33 cents a share, on sales of $2.3 billion. The company’s warning translates into profits of just under 7 cents per share for the same period this year.
Analysts surveyed by First Call Corp. were predicting 29 cents a share.
Long known as a steady money maker for blue-chip investors, The Gillette Co. stunned Wall Street in September when it announced it would lay off 4,700 employees worldwide, or 11 percent of its work force.
Analysts said the company, best known for its Oral B dental care, Duracell batteries and Sensor shaving products, was affected by the troubled Asian economy.
Gillette also announced Thursday that its board of directors has authorized and expansion of its stock repurchase program from 50 million to 75 million shares.
The company’s statement was released after the market closed. Gillette stock closed down 43 3/4 cents at $47.31 1/4, in trading on the New York Stock Exchange. In after-hours trading, shares were trading at $44.50.