Avon Products Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Avon Products (NYSE:AVP) will unveil its latest earnings on Wednesday, August 1, 2012. Avon Products is a global manufacturer and marketer of beauty, fashion, and home products.

Avon Products Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 21 cents per share, a decline of 57.1% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 38 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 22 cents during the last month. Analysts are projecting profit to rise by 43.9% versus last year to 92 cents.

Past Earnings Performance: The company enters this earnings report having missed estimates the last four quarters. Last quarter, the company fell short of expectations by 18 cents, reporting profit of of 10 cents per share against a mean estimate of net income of 28 cents per share.

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A Look Back: In the first quarter, profit fell 81.5% to $26.5 million (6 cents a share) from $143.6 million (33 cents a share) the year earlier, missing analyst expectations. Revenue fell 2% to $2.58 billion from $2.63 billion.

Stock Price Performance: Between May 1, 2012 and July 26, 2012, the stock price fell $4.18 (-21%), from $19.87 to $15.69. The stock price saw one of its best stretches over the last year between January 4, 2012 and January 11, 2012, when shares rose for six straight days, increasing 2.8% (+48 cents) over that span. It saw one of its worst periods between November 11, 2011 and November 25, 2011 when shares fell for 10 straight days, dropping 11.7% (-$2.14) over that span.

Wall St. Revenue Expectations: Analysts are projecting a decline of 7% in revenue from the year-earlier quarter to $2.66 billion.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 6.6% in the second quarter of the last fiscal year, 3.9% in the third quarter of the last fiscal year and 0.2%in the fourth quarter of the last fiscal year before dropping in the first quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.31 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.42 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 9.1% to $3.15 billion while assets rose 1.1% to $4.14 billion.

Analyst Ratings: There are mostly holds on the stock with 11 of 14 analysts surveyed giving that rating.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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