Estee Lauder shares dropped despite reporting better than expected earnings for its third fiscal quarter. Management has raised its annual guidance through strong performance in the Asia-Pacific region and its high-end beauty care. In Asia, sales rose 25% to $966 million, driven by the perfume brand Jo Malone. In total, Estee Lauder’s revenue grew by 11% to $3.74 billion, against a consensus of $3.55 billion. Net profit group share reached 555 million, against 372 million a year earlier. Excluding exceptional items, the US group generated $1.55 EPS (consensus was $1.30). Estee Lauder is now forecasting revenue growth of 7% to 8% for the year (5% -6% previously). Excluding restructuring and other costs, it expects EPS of $5.15 to $5.19 ($4.92-5 previously).
General Electric shares gave back some of the gains made after the US group said it has more than tripled its earnings in the first quarter against a backdrop of growth in sales in the aerospace, oil and gas divisions, and health. The conglomerate confirmed its annual forecast but said the Boeing 737 MAX crisis was a “new risk”. GE manufactures engines in partnership with French Safran.
GE posted a negative cash flow in its industrial activity of $1.2 billion, significantly better than the 2.1 billion average outflows expected by analysts. The group’s new CEO, Larry Culp, who wants to continue asset disposals and restructurings, warned last March that the group’s industrial cash flow could be negative $2 billion. The group aims to return to cash generation from positive industrial activities in 2020 and expects to accelerate the pace of improvement in 2021.
In total, at the group level, sales fell by 2% to $27.29 billion against a consensus of $27.05 billion, profit from continuing operations rose to 954 million (against 261 million a year earlier) and earnings per share was $0.11 compared to $0.03. Adjusted EPS was $0.14. Analysts on average expected $0.09.