Herbalife Profit Rises, Lifts FY Outlook

(RTTNews) - Herbalife Ltd. (HLF) Monday reported an increase in third-quarter profit that easily beat Wall Street expectations, driven mostly by growth at Latin America and China. Moving ahead, the nutrition supplements company lifted its full-year 2013 outlook, and detailed its guidance for 2014.

"We continue to execute on our core strategies and deliver record financial performance, marking our sixteenth consecutive quarter of double-digit top-line growth," said Chief Executive Michael Johnson. "Our initial 2014 guidance demonstrates our belief that the macro trend of global obesity will increase worldwide consumer demand for our products."

Los Angeles, California-based Herbalife's profit rose to $142.0 million or $1.32 per share from $111.9 million or $0.98 per share last year. Adjusted earnings improved to $1.41 per share from $0.98 per share last year. Analysts polled by Thomson Reuters estimated earnings of $1.14 per share for the quarter. Analysts' estimates typically exclude one-time items.

Herbalife is a multi-level marketing company that sells nutritional supplements, energy, sports and fitness products. It has been at the center of attention for investors ever since William Ackman, the activist manager of hedge fund Pershing Square, called it a pyramid scheme that would fail soon. Nonetheless, the company found support with billionaire activist investor Carl Icahn who became a major shareholder of Herbalife. Icahn said that Herbalife has a legitimate business model.

Herbalife's third-quarter volume growth was 13 percent, driven largely by a 32 percent growth in the Latin American region and a 71 percent growth in China.

Sales for the third quarter grew 19 percent to $1.21 billion from $1.02 billion last year. Analysts estimated revenues of $1.19 billion for the quarter.

Looking forward to the fourth quarter, the company expect adjusted earnings of $1.11 to $1.15 per share, with sales growth of 13.5 to 15.5 percent. Analysts currently estimate earnings of $1.15 per share for the quarter, on revenue growth of 15.90 percent.

Herbalife raised its outlook for the full year 2013 and now expect adjusted earnings in the range of $5.19 to $5.23 per share and sales growth of 17 to 17.5 percent. Analysts currently estimate earnings of $4.99 per share for the year, on revenue growth of 16.90 percent.

Previously, the company projected earnings of $4.83 to $4.95 per share for 2013, with sales growth of 16 to 18 percent.

For the full year 2014, the company anticipate adjusted earnings of $5.45 to $5.65 per share, on revenue growth of 9 to 11 percent. Analysts currently estimate earnings of $5.66 per share on revenue growth of 10.40 percent for 2014.

The company also approved a dividend of $0.30 per share, payable on November 26 to shareholders of record November 12.

HLF closed Monday's regular trade at $67.92, up $1.55 or 2.34%, on the NYSE. The stock, however, slipped $0.62 or 0.91%, in after-hours trade.