Revlon declines on weaker-than-expected 3Q

NEW YORK - Shares of Revlon Inc. slipped on Wednesday following third-quarter results that one analyst said looked "like a step backward" for the cosmetics company.

Revlon, which is controlled by financier Ron Perelman, posted a quarterly profit, compared with a year-ago loss.

Earnings in the most recent quarter reported earlier Wednesday were helped by an 86-cent-per-share gain on a business divestiture. Excluding the gain, New York-based Revlon posted a loss.

SunTrust Robinson Humphrey analyst William Chappell said sales fell across all regions, except for Asia and Africa, which represent 21 percent of sales.

Revlon has benefited from a weaker dollar, but recent strength in the dollar is likely to drag on fourth-quarter results, Chappell said.

Chappell also said margins were pressured during the quarter, despite efforts to cut costs.

"We believe the company can do little to improve margins over the next few quarters, especially with the backdrop of slowing consumer spending," Chappell wrote in a client note.

Chappell kept a "Neutral" rating on the stock and said Revlon has established a track record of improving year-over-year profitability over the past few quarters, but the third quarter looks like a step backward.

Shares declined $3.43, or 26.3 percent, to $9.61 Wednesday.

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