Cloudy Europe outlook depresses P&G Procter & Gamble's earnings dropped by nearly half and fell drastically short of market expectations as the worsening outlook of two of its businesses, particularly in Europe, led it to take substantial non-cash impairment charges. Net earnings fell 49 per cent to $1.69bn from a year ago in the three months to December 31 due to a $1.5bn impairment charge that P&G took to adjust the value of goodwill in its appliances business and its professional haircare business. The adjustments reflected the downgrading of sales, earnings and profit forecasts for the businesses by the world's largest consumer goods maker by sales. "The impairments were primarily driven by the prolonged deterioration of the macroeconomic environment, the more discretionary nature of the products, and increasing levels of competitive activity," the company said in a statement. Together, these factors have led to a reduction in expected market size and growth rates for both businesses. This is particularly the case in the western Europe market, where roughly 50 per cent of P&G's appliances and salon professional sales are generated. Company-wide, sales grew 4 per cent to $22.1bn in the quarter. P&G shares fell 0.2 per cent to $64.66 in pre-market trading in New York.