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Dial warns, ousts execs
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August 8, 2000: 9:04 a.m. ET
Issues third profit warning in a year; ousts chief executive and CFO
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NEW YORK (CNNfn) - Consumer products maker Dial Corp. Tuesday unveiled that its fiscal year profit won't meet analysts' forecasts, its third earnings warning this year. It also said it fired two of its senior executives in an effort to restore investor confidence in the troubled company.
 Dial's board took the action after learning the company would have to warn investors yet again that quarterly earnings would be below estimates. Dial warned on June 28 that its earnings will drop 25 percent to 30 percent this year. The maker of Dial soap, Renuzit air fresheners and Armour hot dogs, said it does not expect to meet consensus analyst earnings estimates of 77 cents a share for the current fiscal year ending December 31, 2000.
Former Hasbro Inc. President Herbert Baum will assume the role of chief executive to replace Malcolm Jazoff, Dial's chairman and CEO since 1996. Jack Tierney will take over as acting chief financial officer to replace former CFO Susan J. Riley.
Poor financial performance has caused a slump in Dial stock and fueled speculation of a possible takeover. Shares of Dial (DL: Research, Estimates) were unchanged at 12-13/16 in Monday trade on the New York Stock Exchange. The stock is down from a yearly high of 31.
"The board believes Dial's business is fundamentally sound, but in light of deteriorating operating performance has concluded that new leadership is needed to take full advantage of our world-class brands and rebuild credibility with Dial's owners," Joe Ford, chairman and CEO of Alltel Corp. and an outside member of Dial's board, said in a statement.
Dial's executive switch comes amid a backdrop of consolidation in the food and consumer products industries, with larger rival General Mills agreeing to buy Pillsbury from Britain's Diageo last month, while Anglo-Dutch titan Unilever inked a $24 billion deal to buy U.S.-based Best Foods in June.
Many consumer products companies have come under pressure because supermarket chains, their main customers, have also been in consolidation mode - giving those chains greater leverage in squeezing price concessions from the products makers.
The Wall Street Journal noted that foods manufacturer Sara Lee Corp. made an overture to buy Dial earlier this year. The paper cited analysts who have also mentioned Germany's Henkel already a joint venture partner with Dial, and Japan's Kao as potential bidders for the U.S. company. 
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Dial Corp.
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