Avon CFO: Pressure on Revenue From Forex 'Starting To Lift'
October 29 2009 - 9:57AM
Dow Jones News
Avon Products Inc.'s (AVP) fourth-quarter revenue could benefit
from easing pressure tied to foreign-currency translation, company
Chief Financial Officer Charles "Chuck" Cramb said Thursday.
"Our top line is still impacted by foreign exchange, but that
pressure is starting to lift," Cramb said during an investor
conference Web cast.
While foreign exchange created a drag of 11 percentage points on
Avon's third-quarter revenue, resulting in a 4% revenue decline, it
could provide a mid-single-digit percentage point lift to sales
between the third and fourth quarters, he said.
Cramb said lower spending so far this year means Avon's capital
spending is likely to range from $300 million to $325 million,
compared with an earlier forecast of $325 million to $335
million.
But Avon remains on track to deliver $1.08 billion in cost
savings in the 2012-2013 timeframe, he said.
Earlier Thursday, Avon said third-quarter profit fell 30% as
foreign-currency exchange and restructuring related costs wiped out
improvements in unit sales and supply-chain savings.
Net income fell to $156 million, or 36 cents a share, from $223
million, or 52 cents a share. Revenue fell 4% to $2.6 billion but
rose 7% excluding the impact of foreign-currency exchange as units
grew 5% and the company grew the number of its active
representatives by 10%.
The mean estimates of analysts surveyed by Thomson Reuters were
earnings of 40 cents and sales of $2.57 billion.
Shares of Avon fell 3.0% to $32 in premarket trading.
-By Mary Ellen Lloyd, Dow Jones Newswires, 704-948-9145;
maryellen.lloyd@dowjones.com