(RTTNews) - Health management service provider Weight Watcher's International Inc. (WTW: News ) said Tuesday that its third quarter profit declined slightly over last year, hurt by lower revenues. Quarterly earnings, however, exceeded the analysts' expectations, as did revenues. Looking ahead, the company narrowed its earnings outlook for fiscal 2009.

Net income attributable to Weight Watcher's was $52.6 million or $0.68 per share for the third quarter, compared to $52.7 million or $0.67 per share in the prior year quarter. On average, 6 analysts polled by Thomson Reuters expected the company to report earnings of $0.64 per share for the third quarter. Analysts' estimates typically exclude special items.

The New York-based company's third quarter net revenues declined to $324.5 million from $352.6 million in the third quarter of 2008. Three analysts had a consensus revenue estimate of $318.17 million for the third quarter.

Commenting on the results, David Kirchhoff, president and CEO of Weight Watcher's said, "Although the economic climate continues to impact our business globally, I am encouraged that our third quarter results showed signs of stabilization and modest improvement in most lines of our business."

North American segment recorded revenues of $157.9 million, down from $179.8 million, while revenues from the International segment dropped to $94.7 million from $101.9 million in the same quarter a year ago.

Total meeting fees decreased to $191.5 million from $213.2 million, and product sales declined to $61.2 million from $68.6 million a year earlier. However, Internet revenues rose to $49.7 million from $47.7 million in the previous year quarter.

At the end of the quarter, active online subscribers were 825 thousand, up from 755 thousand a year ago.
During the quarter, Weight Watchers recalled about 420,000 units of Hungry Figures and Hungry Magnets in the United States and 25,000 units in Canada, due to puncture hazard.

The products were manufactured by Shanghai Oriland Toys Co. Ltd. of China, and sold by Weight Watchers between April 2009 and July 2009 for between $4 and $6.

For the nine-month period of 2009, Weight Watcher's posted net income of $158.6 million or $2.06 per share, compared to $156.7 million or $1.98 per share in the previous year period.

Excluding a $27.9 million offset to revenue related to the adverse U.K. VAT ruling, net income was $161.7 million or $2.10 per share, compared to $175.6 million or $2.22 per share in the prior year period.

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