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New product increases Avon's Q2 earnings
31 Jul '06
3 min read
Avon Products Inc reported second-quarter 2006 earnings of $.33 per share, compared with 2005 second-quarter earnings of $.69 per share. The company said the 2006 quarter included a negative impact of $49 million pretax, or $.07 per share after taxes, in costs to implement the current phase of its previously announced restructuring program.
The 2006 quarter also included a net favorable impact of less than $.01 per share resulting from a $.03-per- share benefit from a tax refund, and $.02 per share of incremental tax costs from repatriation of international earnings. The 2005 quarter included a $.20-per-share benefit primarily from settlements of tax audits.
Avon said that total revenue was $2.1 billion in the second quarter of 2006, 5 percent higher year over year (4 percent higher in local currency).
Active Representatives grew 4 percent. Both of these measures benefited from the company's late-2005 acquisition of its licensee in Colombia. Units decreased 1 percent year over year. Total sales of Beauty products in the quarter rose 4 percent in dollars and 3 percent in local currency.
Operating profit of $225 million decreased 35 percent, or $119 million, from the 2005 level, and operating margin was 10.8 percent in the 2006 period, versus 17.3 percent in the prior-year quarter.
Second-quarter 2006 operating profit included costs of $49 million to implement restructuring initiatives under the company's turnaround plan. These initiatives included an organization realignment and downsizing to reduce organization layers and move management closer to its markets, Representatives and consumers, and the exit of certain unprofitable operations.
The 2006 quarter also included a net favorable impact of less than $.01 per share resulting from a $.03-per- share benefit from a tax refund, and $.02 per share of incremental tax costs from repatriation of international earnings. The 2005 quarter included a $.20-per-share benefit primarily from settlements of tax audits.
Avon said that total revenue was $2.1 billion in the second quarter of 2006, 5 percent higher year over year (4 percent higher in local currency).
Active Representatives grew 4 percent. Both of these measures benefited from the company's late-2005 acquisition of its licensee in Colombia. Units decreased 1 percent year over year. Total sales of Beauty products in the quarter rose 4 percent in dollars and 3 percent in local currency.
Operating profit of $225 million decreased 35 percent, or $119 million, from the 2005 level, and operating margin was 10.8 percent in the 2006 period, versus 17.3 percent in the prior-year quarter.
Second-quarter 2006 operating profit included costs of $49 million to implement restructuring initiatives under the company's turnaround plan. These initiatives included an organization realignment and downsizing to reduce organization layers and move management closer to its markets, Representatives and consumers, and the exit of certain unprofitable operations.
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