Estee Lauder's third-quarter net income rose 37% as a cost-cutting program helped offset weak sales in international markets including Southern Europe and South Korea. While earnings surprised analysts, revenue missed expectations. Still, the jump in net income gave a big boost to EL shares, as prices rose nearly 3% in midday trading to a 52-week high.
Net income attributed to holders of its common shares rose to $178.8 million, or 45 cents per share, for the three months ended March 31, up from $130.4 million, or 33 cents per share, a year ago.
Analysts expected earnings of 33 cents per share, according to FactSet.
Revenue rose 2% to $2.29 billion from $2.25 million a year ago. Analysts expected $2.33 billion.
Skin care revenue was flat at $1.02 billion. Makeup revenue rose 5% to $919.2 million. Fragrance revenue rose 1% to $233.2 million and hair care revenue rose 6% to $116.2 million.
Revenue rose across all regions. Revenue from the Americas rose 1% to $988.1 million, helped by strength in makeup and Aveda. Strength in Latin America helped offset weakness in the U.S. and Canada.
Revenue rose 3% in Europe, the Middle East and Africa to $847.9 million. It rose 1% in the Asia/Pacific region to $455.8 million.
The company raised its full year guidance, excluding one-time items, to $2.56 to $2.61 per share, from prior guidance of $2.51 to $2.59 per share. Analysts expect earnings of $2.59 per share.