California-based multi-level nutritional products seller Herbalife beat third quarter earnings estimates and the stock is moving higher.
Herbalife posted earnings per share of $US1.41.
Analysts expected Herbalife to report adjusted EPS of $US1.14, according to data compiled by Bloomberg.
Revenue came in at $US1.21 billion versus estimates of $US1.197 billion.
Shares of Herbalife were trading up more than 5% in after hours.
Here’s an excerpt from the release:
- Third quarter worldwide volume growth of 13 per cent compared to the prior year period.
- Third quarter adjusted1EPS of $US1.41 increased 44 per cent compared to the prior year period.
- Raising FY’13 guidance and introducing FY’14 adjusted EPS guidance to a range of $US5.45 to $US5.65.
- Generated $US226 million in operating cash flow during the third quarter.
- Board of directors approved a $US0.30 per share quarterly dividend.
October 28, 2013 04:15 PM Eastern Daylight Time
LOS ANGELES–(BUSINESS WIRE)–Herbalife Ltd. (NYSE: HLF) today reported third quarter net sales of $US1.2 billion, reflecting an increase of 19 per cent compared to the same time period in 2012 on volume point growth of 13 per cent. Adjusted1 net income for the quarter of $US152.1 million, or $US1.41 per diluted share, compares to the third quarter 2012 net income of $US111.9 million and EPS of $US0.98, respectively. On an as reported basis, third quarter 2013 EPS of $US1.32 increased 35 per cent compared to the $US0.98 reported in the comparable quarter last year.
“Our initial 2014 guidance demonstrates our belief that the macro trend of global obesity will increase worldwide consumer demand for our products.”
“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 Michael O. Johnson, Herbalife’s chairman and CEO. “Our initial 2014 guidance demonstrates our belief that the macro trend of global obesity will increase worldwide consumer demand for our products.”
For the quarter ended September 30, 2013, the Company generated cash flow from operations of $US225.5 million, an increase of 58 per cent compared to 2012, repurchased $US110 million in common shares outstanding under its share repurchase program, paid dividends of $US30.8 million and invested $US31.8 million in capital expenditures.
Guidance for fully diluted 2013 and 2014 EPS is based on the average daily exchange rates of the first two weeks of October 2013. The guidance continues to assume a Venezuelan exchange rate of 10 to 1 for the balance of the year, excludes the impact of the February devaluation of the bolivar as well as any potential future devaluation, and excludes the impact of any future repatriation of existing cash balances in Venezuela. Guidance for the year also excludes the following which were recognised in the first nine months of the year: $US20.6 million in expenses (post-tax), 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, and $US7.3 million in expenses (post-tax) incurred for the re-audit of 2010-2012 financial statements resulting from KPMG LLP’s resignation, as well as any additional expenses related to these matters that are expected to be incurred in the remainder of the year.
Announces Quarterly Dividend
The Company reported today that its board of directors has approved a dividend of $US0.30 per share to shareholders of record November 12, 2013, payable on November 26, 2013.
Also, Dr. Richard Carmona, the 17th Surgeon General of the United States, was just named to Herbalife’s board of directors.
From the release:
LOS ANGELES–(BUSINESS WIRE)–Herbalife (NYSE:HLF) today announced the appointment of Richard H. Carmona, M.D., M.P.H., FACS, and 17th Surgeon General of the United States, to the Company’s Board of Directors, effective October 25, 2013. Dr. Carmona brings more than 40 years of experience in medicine, nutrition, preventative health and business to the Herbalife Board.
“As a scientist and medical professional, I was first attracted by the depth and breadth of Herbalife’s commitment to excellence in nutrition science”
Dr. Carmona joins as an independent Director. With his appointment, Herbalife has increased the size of its Board to 12 members, 9 of whom are independent.
“As a scientist and medical professional, I was first attracted by the depth and breadth of Herbalife’s commitment to excellence in nutrition science,” said Carmona. “As a business person, my due diligence showed me a company of integrity with a good business plan. As the son of poor emigrant parents, I am elated to see the opportunities Herbalife offers to families in health-disparate and economically underserved communities.”
“Dr. Carmona has dedicated his life to improving the relationships among health, culture, education and economic status, and we are pleased to welcome him to Herbalife’s Board of Directors,” said Michael O. Johnson, chairman and chief executive officer of Herbalife. “As a Surgeon General of the United States, a distinguished professor of public health, and an experienced business leader, Richard will be a tremendous addition to our Board. We look forward to leveraging his expertise in our ongoing initiative to ensure the nutritional benefits of all Herbalife products and our continued efforts to empower our distributors around the world.”
Herbalife is the company that’s been at the center of an epic clash of hedge fund billionaires.
Last December, Bill Ackman, who runs Pershing Square Capital, publicly declared he’s shorting $US1 billion worth of Herbalife. He believes the company is a “pyramid scheme.”
Since revealing his short, shares of Herbalife have surged.
A number of hedge fund managers, most notably Carl Icahn, have gone long the stock.
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