Neville Prior

Avon tops 2Q forecasts

Neville Prior  31 July 2015 01:46:35 PM
Image:Avon tops 2Q forecasts
Avon's second-quarter earnings climbed 52 percent, beating consensus Wall Street forecasts as the cosmetics company got a boost from a drop in expenses and lower taxes that countered a currency exchange rate hit to sales. The New York-based company said Thursday that its selling, general and administrative expenses fell 21 percent to $1.02 billion in the quarter that ended June 30. Income taxes also dropped to $33.4 million compared to $45.8 million in last year's quarter. Overall, the direct seller of cosmetics earned $28.8 million, up from $19 million in the same quarter last year. Earnings in the most recent quarter, adjusted for restructuring and non-recurring costs, came to 11 cents per share. That topped Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 7 cents per share. Avon's revenue tumbled 17 percent to $1.82 billion in the period but also topped Street forecasts. Five analysts surveyed by Zacks expected $1.8 billion.

"Our overall second-quarter performance was in line with our expectations in an environment of extraordinary currency pressure," CEO Sheri McCoy said in a statement from the company. The price of Avon's stock rose 12 cents, or 2.2 percent, to $5.50 per share in morning trading Thursday, while broader indexes slumped. Avon Products Inc. shares have dropped 43 percent since the beginning of the year, while the Standard & Poor's 500 index has risen slightly more than 2 percent. The stock has decreased 58 percent in the last 12 months.
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