Coty sharply raises estimate of costs related to P&G deal

* Sees $1.2 bln in deal costs over next 4 years

* Company had originally pegged costs at $500 mln over 3 years

* Swings to a loss in 3rd qtr

* Shares fall as much as 7 pct (Adds details, background, shares)

May 3 (Reuters) - Perfume maker Coty Inc sharply raised its estimate of costs related to its $12.5 billion acquisition of beauty product brands from Procter & Gamble Co , sending its shares down as much as 7 percent on Tuesday.

Coty, the U.S. maker of Calvin Klein and Chloe perfumes, agreed last July to buy more than 40 brands from P&G, including Wella and Clairol hair-care products, as part of its strategy to reduce its dependence on its struggling fragrance business.

The New York-based company said it now expected costs related to the acquisition to total about $1.2 billion over the next four years.

In July, Coty had said it expected costs of about $500 million over three years.

The deal is expected to close in October, the company said.

Coty also swung to a net loss and reported its first profit miss in seven quarters as operational and acquisition-related costs jumped.

The company has been spending billions on expanding its beauty and skin-care businesses to reduce its reliance on its fragrance business, whose sales have fallen for the past seven quarters.

Most recently, Coty paid about $1 billion to buy the beauty care unit of Brazil's Hypermarcas SA.

Fragrance sales, still Coty's biggest business by revenue, fell 4 percent in the third quarter ended March 31. Sales in the company's color cosmetics business rose 11 percent, while those in its skin and body care products division fell 12 percent.

Weak demand for products such as Sally Hansen nail polishes in the United States pushed down sales in the Americas, Coty's second-biggest market, by 7.3 percent.

In Europe, the Middle East and Africa, Coty's biggest market, sales rose 11 percent.

Total net revenue rose just 1.8 percent to $950.7 million but it was the first rise in six quarters.

Coty reported a net loss of $26.8 million, or 8 cents per share, in the quarter. In the year-earlier quarter, net income was $75.5 million, or 21 cents per share.

Excluding items, Coty earned 9 cents per share. Analysts on average had expected earnings of 12 cents per share and revenue of $970.7 million, according to Thomson Reuters I/B/E/S.

Coty recorded $37 million in costs related to acquisitions, up from just $300,000 in the same quarter of 2015. Selling, general and administrative expenses rose 11 percent.

Coty's shares were down 4.5 percent at $29.65 at midday. Up to Monday's close, the stock had risen more than 26 percent in the past 12 months.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza, Don Sebastian and Ted Kerr)