CINCINNATI - Procter & Gamble Co. overhauled its top management Thursday, replacing top executive Durk I. Jager following a series of disappointing earnings results that have led to a profound stock slump at the maker of Tide, Crest and Pampers.
The changes came as the company warned it expects fourth-quarter earnings per share will be equal to last year's, compared with its previous expectations of a 15 percent to 17 percent increase.
Jager, 57, has been president, chief executive and chairman since January 1999. He will retire after 30 years with the Cincinnati-based company, an American industry stalwart built on its 19th century sales successes with soap and candles.
The company's board of directors elected Alan G. Lafley, 52, president of its divisions for global beauty care and North America, as president and chief executive.
John E. Pepper, 61, who headed P&G before Jager and has been heading its board's executive committee, was elected as the board's chairman.
Investors sent shares of P&G down nearly 10 percent, or $6.125, to $56.75 Thursday on the New York Stock Exchange. Since P&G reached its 52-week-high of $118.37 back in January, the company's stock has dropped 52 percent.
P&G did the right thing by reacting now to deal with its problems, rather than letting troubles fester, said analyst Doug Christopher of Crowell Weedon.
''I think it's very healthy,'' Christopher said. ''Past credibility is history. Now they move ahead.''
Jager said he made a personal decision to retire. He said the company made progress with its restructuring to quicken the pace of getting new products to market.
''It's unfortunate our progress in stepping up top-line sales growth resulted in earnings disappointments,'' he said.
Jager's global restructuring plan for P&G also involved cutting 15,000 jobs, closing some 10 plants and streamlining management layers. But the rapid changes took a toll on P&G's earnings, Pepper and Lafley acknowledged during a conference call.
The company, which earned $3.8 billion on $38.1 billion in revenue in fiscal 1999, sells about 300 product brands in more than 140 countries. It employs about 110,000 people worldwide.
On the Net: http://www.pg.com
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