Procter & Gamble chief quits

Famous brands include Pampers nappies

The chief executive of US consumer products firm Procter & Gamble, Durk Jager, has stepped down as the company issued its third profits warning this year.

Mr Jager, a veteran of the firm who has held the posts of chairman, chief executive and president, looked to have made the mistake of over-ambitious forecasting.

As recently as March, analysts were told that the company expected earnings per share for the quarter ending this month to increase by 15-17% on last year's figure.

However, on Thursday it warned that growth would be flat because of low volume growth which it blamed on competition and poor marketing decisions.

The group is best known for brands such as Pampers nappies, Crest toothpaste and Pringles crisps.

Analysts said it was a "huge, huge statement" that Mr Jager had resigned.

Wendy Nicholson of Salomon Smith Barney said the most worrying aspect was that "the turmoil and transition" would continue.

P&G was once admired as one of the best managed companies in the US, but its market capitalisation has fallen sharply this year, down from $165bn (£108bn) in January to less than $85bn.

Shares in the group closed 10% lower on Thursday at $56.75 following the news.

Lafley elected

The board of P&G elected Alan Lafley, president of the firm's global beauty care business, as its new chief executive.

He will be sharing the top jobs with John Pepper, a previous chairman who has come out of retirement to hold that post again.

Mr Lafley admitted that "in hindsight, it's clear we changed too much too fast. We didn't make enough tough choices to balance top and bottom line growth".

He said he would be looking to make investment decisions and find the right balance for growth in earnings and sales.

His review of the portfolio would not include consideration of selling whole businesses, he said.

He also added that he had not ruled out making more senior executive changes.

Analysts said that with the company's share price so low, it could prove difficult to improve growth through acquisitions.

The sale of assets was the more likely option, with the food business, including Pringles crisps, a possibility, they said.

The business could fetch as much as $5-10bn.

Other possible sales include the firm's cosmetics or petfood businesses.