Oct. 30 (Bloomberg) -- Avon Products Inc., the world's largest door-to-door cosmetics seller, said third-quarter profit rose more than analysts estimated on purchases by overseas customers, causing the stock to jump the most in eight months.

Net income climbed 61 percent to $139.1 million, or 32 cents a share, New York-based Avon said today in a statement, beating the average estimate of analysts by 1 cent. Sales rose 14 percent to $2.35 billion, the biggest gain in three years.

Half of Avon's top 14 markets posted sales increases of at least 20 percent, as Chief Executive Officer Andrea Jung's expansion overseas countered slowing U.S. growth. Revenue was helped by a 44 percent increase in advertising, suggesting Jung's use of savings from a restructuring to boost marketing and incentives to its sales force is paying off.

``Emerging markets are ripe for a company that can provide earnings opportunities to women,'' said Mariann Montagne, who helps manage $70 billion at Thrivent Asset Management in Minneapolis. ``The advertising is absolutely working.'' Thrivent held 1.82 million Avon shares as of June 30.

Avon rose $1.70, or 4.4 percent, to $40.77 at 4:16 p.m. in New York Stock Exchange composite trading for the biggest increase since February. The stock has gained 23 percent this year.

Declining Dollar Helped

The dollar's decline helped boost profit outside the U.S. by 6 percentage points during the quarter. Avon spent $96 million on advertising and $37 million on a leadership program and higher payments to its sales force, which grew by 10 percent.

``We are very encouraged with how rapidly the business has responded to the acceleration of our investments in growth,'' Jung, 49, said during a conference call with analysts. ``These investments are paying back even ahead of my own expectations.''

The cosmetics company sells Anew anti-aging cream and Skin- So-Soft through its sales force of 5 million. Montagne estimated more than 90 percent of Avon's sales force is female.

Avon still plans to spend $375 million in advertising this year, 50 percent more than in 2006, and $100 million on programs to support salespeople. Research suggests the company is near the right level of investment for these initiatives to grow in line with revenue, Jung said in the statement.

The cosmetics maker announced a restructuring plan in November 2005 that included job cuts and sending some work to countries where wages are lower. Avon had costs of $33 million in the quarter for the restructuring, to reduce the number of products it sells and outsource some information technology.

Widening Margins

Avon projected next year's operating profit margin to be near that of 2005, when the ratio of operating profit to sales was 14.1 percent. Third-quarter operating margin was 9.5 percent.

Sales in six countries gained at least 20 percent, led by Brazil and Russia. North American sales and the number of active sales representatives gained 6 percent to $605.2 million.

Avon was started in 1886 as the California Perfume Co. when book salesman David McConnell hired women to sell his products door-to-door. The company competes against other direct sellers such as Mary Kay Inc., as well as drugstores that sell makeup including Procter & Gamble Co.'s Cover Girl and L'Oreal SA's Maybelline line.

To contact the reporter on this story: Heather Burke in New York at hburke2@bloomberg.net.

Last Updated: October 30, 2007 16:31 EDT