Updated from 4:07 p.m. EDT

After 18 months on the job, Michael C. Hawley, chairman and chief executive of

Gillette

(G) - Get Report

, was forced to resign Thursday, as the maker of razors and other consumer products reported another quarter of weak financial results.

Investors hailed the management shakeup. Shares of Gillette, which has struggled to meet investors' growth demands as it sold off businesses and coped with foreign currency fluctuations, closed up $4.56, or 16%, to $32.88 Thursday afternoon, after hitting a 52-week low of $27.13 before Hawley's departure was announced. The stock reached a session high Thursday of $33.44. The stock is off a 52-week high of $45.44.

"The board unanimously believes this change in management is in the best interest of the company's shareholders." said Warren E. Buffett, the billionaire value investor who serves as chairman of the executive committee of Gillette's board. In a statement, Buffet, the Boston-based company's largest investor, thanked Hawley for his 39 years of work at Gillette.

Hawley, who stepped down immediately, will be temporarily replaced by two men. Edward F. DeGraan, 57, will be promoted to chief executive from president and chief operating officer. And Richard R. Pivirotto, 70, a board member since 1980, will be acting chairman.

Hawley, 62, rose from the president and chief operating officer job to the top spot in April 1999, when Alfred M Zeien retired at age 68. Zeien, who had the job for more than eight years, remained a board member. Hawley will not.

In a conference call Thursday afternoon, Buffett declined to specify Hawley's perceived shortcomings or what qualities the company would seek in a replacement. He made analogies to football, baseball, track and field, divorce and special education, eventually calling the decision to oust Hawley subjective.

"Anybody in that position, it's a blow to them," he said. "It's no fun to deliver, it's a whole lot less fun to receive it."

A search committee comprising the executive committee of the board will use an outside consulting firm to look for a new chief executive.

"It's our job to be as smart as we can in selecting someone," Buffett said. "I don't have some checklist of 50 items that I use."

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Buffett said that Gillette's recent stock performance was not a factor in Hawley's departure and that he would not take an active role in the company.

For the third quarter ended Sept. 30, the company reported income from continuing operations of $352 million, 1% below the $355 million reported in the year-earlier quarter. Earnings per diluted share rose to 33 cents from 32 cents in the year-earlier quarter as the number of shares outstanding shrank slightly. Analysts polled by

First Call/Thomson Financial

had predicted earnings of 33 cents a diluted share.

Although the company has matched the First Call predictions in almost every quarter since the beginning of 1999, it has warned analysts to lower their estimates in several of those quarters.

Sales were nearly unchanged at $2.32 billion, compared with $2.35 billion a year earlier.

The company's main business line of blades and razors appears to be doing well, adding to its leading worldwide market share. Currency fluctuations have dogged the profitability of foreign sales for years, but Gillette said it could thank improving conditions in developing countries for what growth it experienced this quarter. The company does about 35% of its business outside the U.S.

Sales of Duracell batteries, Braun electric shaving products and toiletries all fell, however, though the company pulled increased profits from the latter two. Conversely, sales of the Oral-B line of toothbrushes climbed 19%, but profits rose only 2%.

In August, the company agreed to

sell its stationery business, which includes Paper Mate pens, to

Newell Rubbermaid

(NWL) - Get Report

.

The price, the main source of suspense since the companies announced on June 1 that they had entered exclusive negotiations, was not disclosed. At the time, the company said it would devote its resources to three main business lines -- grooming, portable power and oral care.