Nutrisystem Shares Gain On Better-than-expected Q3 Results

(RTTNews) - Shares of Nutrisystem, Inc. (NTRI) gained more than 12 percent in extended trades after the weight management products company's revenue for the third quarter beat analysts' expectations and it forecast earnings for the fourth quarter in line with their estimates.

In addition, the company's adjusted earnings results were better than its own forecast provided in July. However, profit for the third quarter slumped 86 percent from last year on a one-time charge that more than offset higher revenues.

Dawn Zier, President and Chief Executive Officer of Nutrisystem, said, "The year-over-year growth in acquisition revenues and customer starts across all channels for the quarter is a strong sign that our strategy is beginning to take hold. The sophisticated segmentation and targeting methodologies implemented over the past year not only attracted and reactivated more customers in the third quarter, but also increased length of stay and the corresponding lifetime value."

Nutrisystem's third-quarter net income was $356 thousand or $0.01 per share, down from $2.59 million or $0.09 per share in the year-ago period. The latest quarter's results include a one-time charge of $5 million or $0.14 per share related to the settlement of a supplier dispute over a historical contract.

The company said that there would be no impact on its financials going forward, and it would continue to work with the supplier in the future.

Adjusted net income for the latest quarter was $4.33 million or $0.15 per share, compared to $2.95 million or $0.10 per share in the same period last year. On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.

While reporting its financial results for the second quarter in late July, the company had projected third-quarter earnings per share in a range of $0.08 to $0.13.

Revenue for the quarter grew 5 percent to $85.36 million from $81.28 million in the prior-year period. Analysts had a consensus revenue estimate of $81.30 million.

Total costs and expenses for the quarter were $83.86 million, up from $79.35 million in the same period last year.

Looking ahead to the fourth quarter, Nutrisystem forecasts earnings in a range of loss of $0.02 per share to earnings of $0.02 per share, and year-over-year revenue growth in the mid-single digits. Analysts expect the company to report a loss of $0.01 per share on revenues of $67.38 million.

The company noted that the upside in its adjusted third-quarter earnings per share enabled it to increase guidance for fiscal year 2013.

The company's board of directors declared a quarterly dividend of $0.175 per share, payable November 18, 2013, to shareholders of record as of November 7, 2013.

NTRI closed Monday's regular trading session at $15.02, down $066 or 4.21 percent on a volume of 1.01 million shares. However, in after-hours, the stock gained $1.88 or 12.52 percent to $16.90.