Earnings Preview: Avon Products

By MAE ANDERSON

NEW YORK

Direct seller Avon Products Inc. reports its second-quarter results before the stock market opens Thursday.

WHAT TO WATCH FOR: How the value of currency, which was volatile during the quarter, played out in different regions for Avon Products.

Jefferies analyst Douglas M. Lane said "the foreign exchange environment has likely become less favorable since the end of the March quarter, but we still don't expect it to be a negative in the quarter."

Other items to watch: any news Avon has on its ongoing bribery investigation in China and other countries as well as its transition in China to direct selling only, rather than a two-tiered structure of retail and direct selling.

WHY IT MATTERS: Avon Products, with roughly 80 percent of revenue coming from outside of North America, provides an important look at spending habits globally.

WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect net income of 45 cents per share on revenue of $2.66 billion. Analyst estimates typically exclude one-time items.

LAST YEAR'S QUARTER: Excluding a restructuring charge of 19 cents per share, Avon earned 38 cents per share on revenue of $2.47 billion.