Estee Lauder profit blows past expectations

CHICAGO (Reuters) - Estee Lauder Cos Inc (EL.N) reported a much higher-than-expected jump in quarterly profit and raised its 2010 forecast as retailers stocked up on new products and the cosmetics maker cut back on spending.

Shares of Estee Lauder jumped 7.4 percent to $44.20 in premarket trading.

Two weeks ago, Estee Lauder said its profit for the first quarter ended on September 30 would come in significantly higher than forecast and that it would raise its annual view despite a cautious take on the economy and consumer spending.

Estee Lauder earned $140.7 million, or 71 cents per share, in its first quarter, up from $51.1 million, or 26 cents per share, a year earlier. In August, it had forecast a profit of 23 cents to 30 cents per share.

Excluding restructuring items, Estee Lauder earned 85 cents per share. Analysts on average were expecting 34 cents, according to Thomson Reuters I/B/E/S.

"While satisfying, these strong results should not mask the challenges and uncertainties we still see in the global economic environment," Chief Executive Fabrizio Freda said in a statement.

The company, known for its namesake line and brands such as Clinique, now expects to earn $1.95 to $2.10 per share this year, up from its August forecast of $1.55 to $1.70. Analysts on average had forecast $1.79.

First-quarter sales fell 3.7 percent to $1.83 billion, topping analysts' expectations of $1.82 billion.

Some of the upside came from sales at duty-free shops, growth in Asia and strong interest in new products after a year of consumer belt-tightening. Cost controls and the improved foreign currency translation also helped drive profit.

Estee Lauder previously said some holiday season orders came earlier than anticipated, which helped first-quarter results.

Skin care sales increased, driven by new products such as Advanced Night Repair Synchronized Recovery Complex. Sales of makeup, perfume and other products declined.

The results came a day after cosmetics makers such as Avon Products Inc (AVP.N), Elizabeth Arden Inc (RDEN.O) and Revlon Inc (REV.N) posted a mixed bag of quarterly results.

Estee Lauder said second-quarter sales should be flat to up 3 percent in constant currency, with earnings of 80 cents to 87 cents per share before restructuring charges. Analysts were looking for a profit of 85 cents.

The company still expects fiscal 2010 sales to be flat to up 2 percent in constant currency.

(Reporting by Jessica Wohl; Editing by Lisa Von Ahn)