Why Inter Parfums Shares Popped and Dropped
Nov 8th 2012 4:10PM
Updated Nov 8th 2012 4:14PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of fragrance-maker Inter Parfums (NAS: IPAR) were smelling sweeter to investors this morning, climbing as much as 13% in early trading on a strong earnings report before giving back all those gains.
So what: Revenue and EPS topped estimates easily, but sales still declined 3% to $166 million due to currency translation. EPS dropped a penny from a year ago to $0.33, but was well ahead of estimates of $0.18. The Europe-focused company saw sales slide by 4% across the Atlantic, though U.S. revenues improved by 4%.
Now what: The drop following this morning's spike is a bit puzzling, though Mario Draghi's comments yesterday about continuing weakness expected in Europe could offer an explanation. Investors may simply have macro concerns about the region, and the fragrance-maker derives the vast majority of its sales from Europe. Inter Parfums will also be losing control of the Burberry fragrance as of March 31, 2013. Based on these factors, analysts are projecting a 33% drop in revenue next year, though these worries seem exaggerated. Inter Parfums still has a number of strong brands in its arsenal, including Montblanc fragrance, sales of which rose 67% this quarter. Management will provide 2013 guidance on Nov. 21, which should provide a clearer picture of its prospects.
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The article Why Inter Parfums Shares Popped and Dropped originally appeared on Fool.com.Jeremy Bowman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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