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Revlon warns of 3Q loss
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October 1, 1999: 12:18 p.m. ET
Cosmetics maker says it will sell some assets; stock plummets
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NEW YORK (CNNfn) - Revlon Inc. warned of a big third-quarter loss Friday and said it planned to sell some of its assets, triggering a 23 percent drop in the cosmetics maker's already-drooping share price.
The debt-ridden cosmetics company, controlled by majority owner Ronald Perelman, projected it will lose $3.10 to $3.20 per share for the third quarter, not including restructuring charges. That compares with the First Call consensus estimate of a 45-cent per-share profit for the July-September period.
Fourth-quarter results also will be lower than expected.
In midday trading, Revlon (REV) stock sank 4-5/16 to 13-15/16.
Revlon also said Friday it is in violation of parts of its credit agreement and is talking with lenders about amending the pact. The company said it is talking with potential buyers about selling its professional products business and non-core Latin American brands, expected to bring about $500 million in gross proceeds. Those sales are scheduled to be completed by the end of the first quarter of 2000.
But the company ruled out selling its other businesses, which include the namesake Revlon brand as well as the Almay, Charlie and Flex brands of cosmetics, hair care products and fragrances. Amid Revlon's well-publicized woes, Wall Street has widely speculated the company may be a takeover target.
Revlon said it has reduced shipments through the end of the year in an effort to cut retailers' inventory levels, resulting in a sales decline of about $280 million in the third and fourth quarters.
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Revlon
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