Procter & Gamble's shares plunged after it issued a third quarter profits warning, blaming the collapse of currency in Turkey where it is market leader in nappies and soap powders. The announcement came just weeks after P&G chief executive Alan Lafley assured investors the consumer products giant would meet earnings estimates for the year. Given Turkey only represents 1% of sales, some analysts were suspicious when Lafley cut group earnings estimates for the third quarter by up to 4% and unit volumes and sales by 1%. "It's a cover up," said one analyst, pointing out that sales were down in four out of P&G's five divisions in the second quarter results in early February. Lehman Bros analyst Nick Sochovsky blamed P&G's "inflexible" centralised management structure. "Unilever is being far more entrepreneurial at the moment. Global brands really don't work as well as they used to. Consumers want local brands." But Investec Henderson analyst David Lang said the warning came as "no surprise at all" given P&G has a 40% market share in Turkey where growth and profit margins were high. By contrast, Unilever deals mainly in low margin edible fats in Turkey and naturally has not been hit as hard. "It's no secret P&G has had a rough time in Europe and faces particularly tough competition from Henkel [in Germany],and there's been some tussles with the retail trade in France," said Lang. "But they are going through a reorganisation and this is going to have an impact." {{NEWS }}

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