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P&G issues 3Q warning
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February 26, 2001: 12:15 p.m. ET
Consumer products maker sees lower profit, sales due to turmoil in Turkey
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NEW YORK (CNNfn) - Procter & Gamble Co. warned Monday that it could miss Wall Street's earnings forecasts for the latest quarter and full year due to weak sales in Turkey, and the consumer goods maker's stock sank on the news.
Last week, Turkey's government decided to abandon exchange-rate controls on its currency, the lira, as a means of stemming one of its worst financial crises in decades. P&G records about $400 million in annual sales in Turkey, making the country it's 12th largest market.
Cincinnati-based Procter & Gamble (PG: Research, Estimates) said it now expects a third-quarter profit between 69 and 72 cents a diluted share. Analysts on average had expected the company to earn 72 cents a share, according to earnings tracker First Call.
 The maker of Tide laundry detergent, Pampers, Pringles potato chips and other popular products also said it expects a 1 percent decline in unit volume and sales, and that full-year earnings will be off by about 5 cents a share. Wall Street has forecast $3.15 a share earnings for the year.
"The sudden crisis in Turkey is unfortunate. However, we will not sacrifice plans undertaken elsewhere around the world to get the business back on track in order to offset this short-term issue," CEO A.G. Lafley said. "Instead, we will continue to focus on big brands and leading customers, tighter cost and cash management and better consumer value to get our business growing again."
Merrill Lynch Analyst Heather Hay Murren said in a note Monday she doesn't believe the crisis will significantly hurt P&G in the long term, and that she still expects it to post a strong second-half of 2001.
"If the stock opens weak due to worry about exposure to the emerging markets, we would be buyers, particularly on weakness based on the fact that all the other macro factors continue to get more favorable as we move forward," Murren said. "In addition, we believe that this problem is probably unique to PG, and we do not believe we will see similar announcements from other companies."
P&G stock, one of 30 in the Dow Jones industrial average, fell $4.83 to $70.20 in midday trading. 
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