Embattled nutritional products maker Herbalife Ltd. (HLF) said Monday after the markets closed that its first quarter profit rose 10% from last year, helped by strong volume growth worldwide, especially in Asia-Pacific and South & Central America.
The company's quarterly earnings per share, excluding items, also came in above analysts' expectations. At the same time, the company forecast second quarter earnings below analysts' current consensus estimate, but raised its full year 2013 earnings outlook.
"We continue to deliver record results in sales and profitability as our independent distributors successfully execute numerous growth strategies that enable deeper market penetration, developing customers using our weight management and targeted nutrition products every day," said Michael Johnson, Herbalife's chairman and CEO.
Herbalife shares are currently losing 0.13% in after hours trading after closing the day's regular trading session at $38.75, up 48 cents or 1.25%. The shares trade in a 52-week range of $24.24 to $71.02.
A multi-level marketing company, Herbalife sells an array of weight management, nutritional supplement, energy, sports and fitness, and personal care products. The company has been the center of attention for investors ever since Pershing Square Capital Management LP's William Ackman took a large short position in the company, and dubbed the company as a pyramid scheme and doubted its business model.
However, activist investor Carl Icahn has come to the company's rescue, taking a stake in Herbalife and putting two representatives on the company's board of directors. Icahn has said Herbalife has a legitimate business model, with favorable long-term opportunities for growth. Third Point LLC's Daniel Loeb has also taken a stake in nutritional supplements maker.
Earlier this month, KPMG LLP resigned as the independent auditor for Herbalife following alleged insider trading by one of its former senior partners. The former partner is said to have provided inside information of the firm in exchange for money to an outsider who used it to trade stocks.
For the first quarter ended March 31, 2013, Los Angeles-based Herbalife reported net income of $118.9 million or $1.10 per share, compared to $108.2 million or $0.88 per share for the year-ago quarter.
Excluding the impact of the devaluation of Venezuela's currency and expenses incurred responding to attacks on the company's business model, adjusted net income for the latest quarter was $137.4 million or $1.27 per share.
On average, 6 analysts polled by Thomson Reuters expected the company to earn $1.07 per share for the first quarter. Analysts' estimates typically exclude special items.
Net sales for the first quarter rose 17% to $1.12 billion from $964.18 million in the same quarter last year on volume point growth of 13%. Five analysts had a consensus revenue estimate of $1.1 billion for the first quarter.
During the first quarter, the company repurchased 4.0 million shares at an average cost of $40.61. There is currently $787.6 million remaining on the existing $1 billion share repurchase authorization.
Herbalife said Monday that its board of directors has approved a dividend of $0.30 per share, payable on May 28 to shareholders of record on May 14.
Looking forward, the company forecast second quarter adjusted earnings of $1.14 to $1.18 per share on net sales growth of 11% to 13%. Analysts currently expect the company to earn $1.26 per share on sales growth of 13.60% for the second quarter.
The company raised its full year 2013 adjusted earnings guidance to a range of $4.60 to $4.80 per share from its prior guidance of $4.45 to $4.65 per share
The company said it now expects full year 2013 net sales to grow 13% to 15%, compared to its prior forecast of 12% to 14% growth.
Analysts currently expect the company to earn $4.66 per share on sales growth of 13.50% for the full year 2013.
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