Sweet smell of success for Estee Lauder

Investors shopped for shares of Estee Lauder, the beauty products and fragrance company reporting fiscal third-quarter earnings that eclipsed forecasts.

The New York-based company also lifted its full-year sales guidance. It reported profits of $272.1m, or 71 cents a share, in the three months ended in March compared with $213.2m, or 54 cents a share, in the year-ago period. Sales rose 1 per cent to $2.58bn.

Analysts on Wall Street had forecast earnings of 51 cents a share on sales of $2.54bn.

"Our growth this quarter again came from multiple engines, with particular strength in the UK and emerging markets, our luxury and make-up brands, and online, speciality-multi and freestanding store channels," said Fabrizio Freda, chief executive.

The company said that sales were unfavourably affected in all of its geographic regions because of the strength of the US dollar.

Sales in the Americas, which accounted for nearly 42 per cent of its sales last year, rose 4 per cent but climbed 8 per cent on a constant currency basis.

In Europe, the Middle East and Africa, which accounted for 38 per cent of Estee Lauder's sales last year, sales fell 1 per cent but climbed 10 per cent on a constant currency basis.

In Asia Pacific, reported sales were flat but 5 per cent higher when stripping out the impact of foreign exchange fluctuations.

The company also lifted its full-year guidance and said it expects constant currency sales growth of 6-7 per cent. It had previously forecast 5-6 per cent growth.

Estee Lauder, which gained 20 per cent in the past year, was among the best-performing stocks on the S&P 500, rising 6 per cent to $88.63.

Shares of car rental company Avis Budget declined nearly 3 per cent to $54.27 after the company reported an unexpected first-quarter loss as dollar strength weighed on its results.

The company said it lost $9m, or 9 cents a share, as sales slipped 1 per cent to $1.85bn. Analysts on Wall Street expected the company to report net income of $9m, or 12 cents a share, on sales of $1.9bn.

The number of Tesla Motors bulls on Wall Street climbed to 12 on Tuesday after analysts at Jefferies began coverage on the stock with a "buy" rating and a price target of $350.

"Worries about China sales are overblown as detailed consumer survey uncovers Tesla could sell at least 500,000 cars a year by 2020 in North America and western Europe alone," said Dan Dolev, an analyst at Jefferies. Tesla shares gained 1 per cent to $232.92.

Netflix shares advanced nearly 4 per cent to $575.82 after analysts at Bank of America upgraded the stock to "buy" from "underperform" and raised their price target to $722 from $350.

The S&P 500 utilities sector fell 2.3 per cent, leading the declines on the benchmark index.

The S&P 500 slid 0.7 per cent to 2,100.59, the Dow Jones Industrial Average declined 0.4 per cent to 17,994.90 and the Nasdaq Composite declined 1.1 per cent to 4,960.16.

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