The weaker euro claimed another corporate casualty on Tuesday as shares of
fell sharply following the consumer product maker's disclosure that the faltering currency would weigh on its sales.
After the announcement, one influential analyst, Heather Hay of
, cut her 2000 earnings expectations to $1.23 a share from $1.25 a share due in part to the weak euro.
"Although we are encouraged by the level of communication and clear progress on working capital issues, we remain concerned with recent weakness in
, international challenges stemming from the soft euro and rising interest rates," Hay wrote in a report.
Shares of Gillette, which derives 33% of its sales volume from the 11-nation euro zone, were down 2 9/16, or 7%, at 35 3/16 in late afternoon trading Tuesday. (Gillette closed down 2 5/8, or 7%, at 35 1/8.)
Nicola Pugliese, Gillette's director of financial communications, said she was disappointed by the market's reaction to the comments made about the euro at an analysts meeting on Monday, noting that nothing new had been said.
"Sales growth for the second quarter was previously estimated in the low to single-digit range," Pugliese said. "We now believe it will come in on the low end."
Pugliese attributed the revised expectations to pressure stemming solely from the weak euro. She declined to comment on the Boston-based company's financial strategies for offsetting damage caused by the sluggish currency.
She noted, however, that Gillette was comfortable with the
First Call/Thomson Financial's
earnings estimates of 28 cents a share for the second quarter and $1.26 a share for the full year.
Earlier this month, Wall Street investment banks lowered their earnings estimates for fast-food
due to fears of the declining single European currency.
The euro, which began life at an exchange rate of about $1.17 to the dollar in January 1999, has slid fairly steadily since, falling to a new low near 88.40 cents on Friday before bouncing back slightly. The currency was trading at about 90.40 cents on Tuesday afternoon. A weaker currency means that profits in euros translate into fewer dollars when repatriated.