Shares of Herbalife Ltd. (HLF: Quote) gained 6 percent in extended trade on Monday after the weight-loss supplements supplier reported better-than-expected results for the second quarter and raised its earnings outlook for fiscal 2012.
Michael Johnson, chairman and CEO of Herbalife said, "The broad strength of our business success continued throughout the second quarter with strong sales performance from each of our six regions, along with record earnings and strong cash flow."
Johnson added, "We believe the underlying drivers of our current business success, engaged distributors focused on globalizing daily consumption sales methods and products which are relevant for today's global macro trends of obesity and an aging population, will continue to provide the catalyst for future growth."
Herbalife's second-quarter net income was $133.37 million or $1.10 per share, up from $111.18 million or $0.88 per share in the year-ago period.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.96 per share for the quarter. Analysts' estimates typically exclude one-time items.
Worldwide net sales for the quarter rose 17 percent to $1.03 billion from $879.65 million in the year-ago period and topped analysts' consensus estimate of $978.97 million.
Volume points rose 23 percent from last year to 1.20 billion, with the company recording increases in each of its six regions.
Looking ahead to the third quarter, Herbalife expects earnings in a range of $0.97 to $1.01 per share on sales growth in a range of 10 percent to 12 percent. Analysts currently estimate earnings of $0.99 per share for the quarter on revenues of $988.88 million.
For fiscal year 2012, Herbalife now expects earnings of $3.88 to 3.98 per share on net sales growth of 15 percent to 17 percent. The company's prior estimate was for earnings of $3.58 to $3.74 per share on net sales growth of 12.5 percent to 14.5 percent.
Analysts expect the company to earn $3.80 per share for the year on revenues of $3.92 billion.
Further, the company's board of directors approved a dividend of $0.30 per share, payable on August 30, 2012 to shareholders of record effective August 14, 2012.
Following the completion of the prior $1 billion share repurchase authorization, Herbalife's board authorized a new $1 billion share repurchase authorization available to be utilized over the next 5-year period, expiring on June 30, 2017.
Herbalife also amended its credit facility to add a new $500 million term loan to the existing $700 million senior credit facility entered into in March 2011. This new facility was arranged by Bank of America Merrill Lynch with RaboBank, HSBC and Wells Fargo as joint lead arrangers and joint book managers.
HLF closed Monday's regular session at $51.69, down $2.11 or 3.92 percent on a volume of 3.52 million shares. In after-hours, the stock gained $3.10 or 6 percent to $54.79.
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by RTT Staff Writer
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