May 31, 2007 / 12:45 PM / 12 years ago

Blyth cuts outlook, shares tumble 10 pct

(Recasts with analyst comment, stock move)

NEW YORK, May 31 (Reuters) - Blyth Inc. BTH.N posted a quarterly profit on Thursday versus a year-earlier loss, but the candle maker’s sales missed estimates, sending shares down as much as 10 percent.

Blyth, which sells candles and other home decor products through home parties, reported first-quarter net income of $11.7 million, or 30 cents per share, compared with a loss of $30.6 million, or 75 cents per share, in the year-ago quarter. Excluding one-time items the company earned 32 cents per share.

Avondale Partners analyst Douglas Lane, who had been expecting 22 cents per share, said the better-than-expected earnings were the result of improved gross margins and an adjusted tax rate that was lower than he had estimated.

“However, sales missed, and PartyLite US, the single largest division, continues to struggle with double-digit declines in sales and consultants,” Lane said in a research note.

Net sales for the first quarter ended April 30 fell 3 percent to $270.4 million, as weak U.S. sales of PartyLite products offset higher Canadian and European sales. Two analysts had an average estimate of $299.6 million, according to Reuters Estimates.

PartyLite sales fell 14 percent in the U.S., but rose 10 percent in Canada and 8 percent in Europe.

“While the near-term news flow has been favorable, we continue to believe that the underlying businesses on balance are struggling, and its most healthy business, PartyLite Europe, is facing more difficult operating and currency exchange comparisons as the year progresses,” Lane wrote.

Blyth lowered its full-year 2008 earnings per share forecast to a range of $1.02 to $1.12, from a previous range of $1.07 to $1.17, to reflect restructuring and impairment charges related to the recent sale of Blyth HomeScents International, its North American fragrance business.

But excluding restructuring and impairment charges, the Greenwich, Connecticut-based company said it expects full-year earnings per share of $1.32 to $1.37, up from its prior forecast of $1.22 to $1.27.

Blyth shares were down $2.65 or 8.8 percent at $27.57 on the New York Stock Exchange late in the session. Earlier, they fell as low as $27.20.

((Reporting by Martinne Geller and Anupreeta Das, editing by Gerald E. McCormick; Reuters messaging: martinne.geller.reuters.com@reuters.net; martinne.geller@reuters.com; +1 646 223 6023)) Keywords: BLYTH RESULTS/

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