Nu Skin Enterprises, Inc. Beats Earnings Expectations

Nu Skin Enterprises, Inc. (NYSE:NUS) released its fourth quarter earnings results today, posting earnings of $2.02 per share on revenue of $1.06 billion. Analysts had, on average, been expecting earnings of $1.99 per share on $1.07 billion in revenue.

Nu Skin warns about China probe

Nu Skin Enterprises, Inc. (NYSE:NUS) said its fourth quarter revenue was a new record and reflects 82% year over year growth. For the full year, revenue was $3.17 billion, a 49% growth year over year. The big problem in the company’s results was how great of a role China played in them. During the fourth quarter, Nu Skin saw its revenue from China alone grew 248% to $481.6 million.

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Shares of the multi-level marketing company declined because management warned its bottom line would be affected by the ongoing investigation in China. A number of agencies there said they were investigating allegations that Nu Skin Enterprises, Inc. (NYSE:NUS)’s business structure in China is illegal. Since the probes were announced, the company has suspended its promotion meetings and stopped taking applications for new distributors.

Breaking down Nu Skin’s results

Nu Skin Enterprises, Inc. (NYSE:NUS) reported a 6% positive benefit from foreign currency exchange and a 232% increase in sales leaders in Greater China. The number of actives rose 127% year over year in China.

In North Asia, Nu Skin Enterprises, Inc. (NYSE:NUS) reported $286.3 million in revenue, compared to $246.9 million in the same quarter a year ago. In the South Asia / Pacific region, the company’s revenue grew 57% to $99.5 million, while in the Americas, revenue increased 59%, growing to $126.1 million for the quarter. In Europe, revenue rose 21% to $62.3 million for the quarter. Sales leaders fell 1%, while actives increased 3% sequentially.

Nu Skin guides for 2014

Nu Skin Enterprises, Inc. (NYSE:NUS) said it expects to see earnings per share of between 90 cents and 94 cents, which fell short of estimates at $1.20 per share. The company expects negative impacts from the ongoing investigation in China.