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Estee Lauder 1Q net income rises 8 pct

NEW YORK (AP) -- Estee Lauder's first-quarter net income rose 8 percent, boosted by strong sales growth in North America and China.

But the New York beauty company, whose brands include MAC, Aveda and Estee Lauder, lowered the high end of its previous full-year sales prediction and issued a lower-than-expected outlook for the current quarter. That pushed shares down at midday.

For the quarter ended Sept. 30, the company earned $299.5 million, or 76 cents per share, up from $278.6 million, or 70 cents per share, in the same quarter last year.

Excluding restructuring and debt-related charges, Estee Lauder said it posted an adjusted profit of 79 cents per share for the recent quarter. The profit beat Wall Street predictions. Analysts, on average, expected a profit of 76 cents per share, according to a FactSet poll.

Revenue rose 3 percent to $2.55 billion from $2.48 billion, while analysts expected $2.54 billion.

Excluding the effects of currency exchange rates, the company said revenue rose 6 percent. Estee Lauder, like other companies that do significant business outside the U.S., can be hurt by a rising dollar because income earned in foreign currencies shrinks when it's translated back into a stronger U.S. dollar.

The company credited the sales growth to higher demand in North America and China. Sales in the Americas rose 7 percent to $1.8 billion, while Asia Pacific sales increased 6 percent to $542.5 million.

Overall, sales of skincare products rose 4 percent to $1.11 billion, while makeup sales increased 3 percent to $960.4 million. Fragrance sales fell 3 percent to $347.6 million.

For the current quarter, the company said it expects to post an adjusted profit of 97 cents to $1.03 per share, below average analysts' predictions of $1.13 per share.

Estee Lauder raised the lower end of its previous adjusted earnings prediction by 3 cents, saying that it now expects to earn $2.47 to $2.56 per share for the year. Analysts expect $2.57 per share.

But on a constant currency basis, Estee Lauder said it expects its sales to rise 6 to 7 percent for both the current quarter and the year. The company previously predicted an increase of 6 to 8 percent for the year.

Separately on Thursday, Estee Lauder said its board increased the annual dividend on the company's Class A and Class B common stock to 72 cents. The new dividend represents a 37 percent increase over the company's previous dividend of 52.5 cents per share.

The dividend will be paid on Dec. 17 to shareholders of record as of Nov. 30.

Estee Lauder also said that it will move to a quarterly dividend payout schedule starting in calendar year 2013. The first quarterly dividend of 18 cents is expected to be declared in February and paid in March.

The board also approved the repurchase of up to another 40 million shares of the company's Class A common stock, which represents about 10 percent of its total outstanding common stock. That increases the company's total authorization to 216 million shares, of which about 164 million have been bought back so far.

Estee Lauder has a total of about 387 million common shares outstanding.

In midday trading, shares of Estee Lauder Cos. fell 37 cents to $61.25.