Blyth Surges on Guidance

Blyth(BTH Quote) surged 13% after it swung to a loss in the second quarter, hurt by a goodwill impairment charge.

The Greenwich, Conn.-based company lost $89.4 million, or $2.24 a share, in the quarter, compared with the earnings of $4.2 million, or 10 cents a share, a year ago. Adjusted for goodwill impairment charge and loss from discontinued operations, the company earned 13 cents a share in the most recent quarter. Analysts surveyed by Thomson First Call were expecting loss of 4 cents a share.

Second-quarter earnings include a pretax goodwill impairment charge of $36.8 million related to revaluation of goodwill associated with Blyth's North American wholesale businesses. The company recorded a loss of $68.6 million, or $1.72 a share in the quarter, on the discontinued operations of Edelman, Euro-Decor, Gies and Colony, Blyth's European wholesale home and seasonal decorations companies and candle businesses.

Second-quarter revenue increased 2.5% from a year ago to $262.6 million, on higher sales in the company's direct selling and catalog and Internet segments. Analysts were expecting revenue of $268.3 million.

The company now expects to post loss of $1.92 a share to $1.97 a share in the year 2007, including sale and discontinued operations losses of $2.66 a share and goodwill impairment charge of 66 cents a share. Adjusted earnings are expected to be $1.35 a share to $1.40 a share. Analysts expect earnings of $1.12 a share in the year 2007.

"Blyth reported higher second quarter sales primarily due to continued strong growth in PartyLite's international markets. Nevertheless, second quarter profits were challenged by continued commodity cost increases and lower sales volume across several of our U.S. businesses," the company said.