Oriflame's Results-Day Roller Coaster Just Got Even More Fun

(Bloomberg) -- Oriflame Holding AG earnings days often contain a big surprise and Thursday was no exception.

Shares in the Swedish door-to-door cosmetics seller rose as much as 16 percent after fourth-quarter profit handily beat estimates, a move that couldn’t be described as unusual. In 11 of the last 20 quarters, earnings have either beaten or missed estimates by at least 10 percent -- and shares on results days have had equally wild moves. Thursday’s gain was the steepest since the stock soared 21 percent on Aug. 17, the day of second-quarter earnings.

Such frequent earnings surprises may be a function of the company having a vast geographic spread, but only limited research coverage. About 18 percent of last year’s 1.36 billion euros ($1.7 billion) of sales came from its largest market of Russia, with China accounting for 14 percent and Mexico about 6.5 percent.

Of the six mainly Scandinavian brokerages that have the stock under coverage, two have buy recommendations, two advise clients to hold, and two say sell. It’s little wonder the stock rarely has a dull moment.

To contact the reporter on this story: Paul Jarvis in London at pjarvis@bloomberg.net.

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Beth Mellor

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