Herbalife Ltd. (HLF) Beats Estimates, Raises Guidance, Shares Surge

Herbalife Ltd. (HLF) Beats Estimates, Raises Guidance, Shares Surge

Herbalife Ltd. (NYSE:HLF) reported its June quarter results after closing bell today, coming out ahead of expectations, raising its 2013 guidance and sending the stock up as much as 6 percent. The company reported record second quarter net sales of $1.2 billion. Adjusted net income was $1.41 per diluted share. Reported second quarter earnings per share were $1.34, a 23 percent increase over the same quarter a year ago.

Herbalife Ltd. (HLF) Beats Estimates, Raises Guidance, Shares Surge

Analysts had been expecting the nutritional supplements company to report earnings of $1.18 per share on revenue of $1.16 billion. Shares of the company’s stock had already been climbing ahead of today’s earnings report as rumors about a major share buyback plan began circulating.

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Details from Herbalife’s report

Herbalife Ltd. (NYSE:HLF)’s latest results record the company’s fifteenth consecutive quarter of double-digit growth, according to Chairman and Chief Executive Officer Michael O.  Johnson. The company generated cash flow from operations of $213.8 billion, which is a 56 percent increase over the same quarter a year ago.

Herbalife raises guidance, updates capital return plan

The supplements company increased its 2013 fiscal year guidance for fully diluted earnings per share, bringing it up to between $4.83 per share and $4.95 per share.

The company’s board of directors also approved a 30-cent per share dividend for shareholders of record Aug. 13. It will be payable on Aug. 27.

Herbalife takes a crack at Ackman

In the company’s earnings report today, it did make mention of Ackman’s claim that it’s a pyramid scheme, although it didn’t name him specifically. Under its guidance section, it said the guidance excludes $15.1 million in post-tax expenses, “mostly legal and advisory services relating to the Company’s response to information put into the marketplace by a short seller which information the company believes to be inaccurate and misleading.”

The company also excluded $2.7 million in post-tax expenses for the re-audit of its financial statements from 2010 to 2012 after the resignation of its previous accounting firm KPMG LLC.

Herbalife has a great earnings record

Herbalife’s track record in terms of earnings has certainly been impeccable, according to Steven Russolillo, a contributor to the MoneyBeat blog on The Wall Street Journal, and that impeccable record continues. He notes that FactSet data indicates that Herbalife Ltd. (NYSE:HLF) has beat the expectations of analysts in each of the last 17 quarters consecutively. In 13 of those cases, shares of the company’s stock rose the following day.

The company hasn’t missed consensus since 2008, when it only missed expectations by just one penny.

Bill Ackman is hurting now

Needless to say, activist investor Bill Ackman is probably hurting right about now as his massive short position in the company continues to be a thorn in his side. Sources had told the New York Post that he hadn’t moved to cover the short position he publicly announced late last year. We’ll have to wait and see if that changes any time soon.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at [email protected]
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