Herbalife Profit Tops Street; Lifts FY Outlook

(RTTNews) - Nutrition supplements company Herbalife Ltd. (HLF), Tuesday reported a better-than-expected increase in fourth-quarter profit, driven by robust growth in China, Americas and EMEA regions. The company also raised its guidance for 2014.

Herbalife shares gained 2.3 percent in after-hours trade on the New York Stock Exchange.

"Herbalife delivered another year of record financial performance achieved through the consistent execution of key strategies to expand daily consumption of our products," said CEO Michael Johnson.

A multilevel marketing firm, Herbalife sells nutritional supplements, energy, sports and fitness products. While its stock price has gained strength, the company has been dubiously portrayed by some critics as a pyramid scheme enterprise that will fail.

Its most acerbic critic has been William Ackman, the activist manager of hedge fund Pershing Square, while key investor Carl Icahn believes that Herbalife has a legitimate business model. On January 24, Herbalife stock tumbled after Senator Ed Markey called for a probe into the allegations.

For the fourth quarter, Los Angeles, California-based Herbalife posted net income of $123.5 million or $1.15 per share, compared with $112 million or $1 per share last year.

Excluding items, adjusted earnings for the quarter were $137 million or $1.28 per share, compared with $112 million or $1.05 per share a year ago.

On average, four analysts polled by Thomson Reuters estimated earnings of $1.25 per share for the quarter. Analysts' estimates typically exclude one-time items.

Sales for the fourth quarter jumped 20 percent to $1.27 billion from $1.06 billion in the prior year. Analysts estimated sales of $1.25 billion for the quarter.

Volume in the quarter was up 13 percent. Volume in China more than doubled, South America spiked 25 percent, EMEA was up 17 percent, North America grew 7 percent and Mexico climbed 5 percent. Asia Pacific was down 4 percent.

For fiscal year 2014, Herbalife now expects adjusted earnings of $5.85 to $6.05 per share, from its prior guidance of $5.45 to $5.65 per share. Analysts currently expect earnings of $5.87 per share for the year.

The company's new outlook reflects the impact of recent financial transactions and share repurchase.

For the first quarter, Herbalife lifted its adjusted earnings outlook to $1.25 to $1.29 per share. Analysts currently expect earnings of $1.35 per share for the quarter.

Herbalife also announced a quarterly dividend of $0.30 per share.

Herbalife stock closed Tuesday at $68.93, up $2.54 or 3.83%, on a volume of 4 million shares. In after hours, the stock gained $1.65 or 2.39% at $70.58. In the past year, the shares trended in the range of $34.52 - $83.51.