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Estee Lauder Companies Shares Slip on Earnings Outlook (EL)

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Estee Lauder Companies Inc. (NYSE: EL) shares have fallen sharply in trading today after the New York City-based beauty products company issued a third-quarter earnings forecast that fell short of Street estimates. The company also released its second-quarter financial results.

Estee Lauder shares fell to an intra-day low of $54. At last check, the stock was down 3.55% to $56.77 on above average volume of 6.68 million.


Estee Lauder, which manufactures cosmetics and skin care products, today said that it expects third-quarter earnings to come in between $0.27 per share and $0.31 per share. Excluding restructuring charges, the company expects third-quarter earnings to come in between $0.28 per share and $0.32 per share. This is well below analysts’ forecast of earnings of $0.41 per share.

Estee Lauder said that its forecast is based on expected slowdown in sales of more expensive beauty industry overseas, especially in Europe, Japan and Australia, due to uncertain economic environment.

Estee Lauder’s weak earnings outlook has overshadowed its solid results for the second quarter.

For the second quarter ended December 31, 2011, Estee Lauder reported net income of $396.7 million, representing an increase of 15% over the same period in the previous year. The company’s revenue for the quarter rose 10% to $2.74 billion. Analysts had forecast Estee Lauder to report earnings of $1.01 per share and revenue of $2.74 billion for the second quarter ended December 31, 2011.

At 18%, Estee Lauder’s sales in the Asia-Pacific region rose the most during the second quarter. The company’s sales in Europe, Middle East and Africa rose 5%, while its sales in the U.S. rose 8%.

Fabrizio Freda, President and CEO of Estee Lauder, said that the company’s string second-quarter results complete an outstanding first half performance. Freda said that the company’s flexible business model enabled it to outpace the global beauty industry.

 

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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