Health management service provider Weight Watchers Int'l Inc. (WTW), Thursday reported a second-quarter profit that declined from the comparable quarter last year, primarily hurt by one-time charges, as well as a decline in revenues. Quarterly earnings as well as revenues, however, came in ahead of analysts' estimates. The company also revised its forecast for the full year 2009.
Quarterly net income dropped to $58.8 million or $0.76 per share from $46.6 million or $0.59 per share in the same quarter last year, negatively impacted by after-tax restructuring charges of $1.2 million related to previously disclosed cost savings initiatives.
Excluding restructuring charges and adjusting results of the comparable quarter a year ago, earnings for the second quarter declined to $60.0 million or $0.78 per share from $67.2 million or $0.85 per share in the same quarter last year.
On average, five analysts polled by Thomson Reuters expected earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude special items such as one-time charges or gains.
Operating income for the second quarter increased to $111.3 million from $101.3 million in the same quarter last year.
Net revenues for the second quarter decreased to $372.5 million from $400.0 million in the comparable quarter last year, marginally above analysts' estimate of $371.24 million.
The decline in quarterly revenues was primarily due to decreases in revenues from the North American segment as well as International segment. North American segment recorded revenues of $393.6 million, down from $442.6 million, while revenues from the International segment dropped to $223.1 million from $245.8 million in the same quarter a year ago. The decline in meeting fees, as well as product sales also hurt quarterly revenues.
Commenting on the results, David Kirchhoff, president and chief executive officer, Weight Watchers, said, "In the midst of this difficult economic environment, we were able to deliver second quarter earnings per fully diluted share nearly comparable to the prior year level, after adjusting for $0.06 per fully diluted share of unfavorable year-over-year foreign currency fluctuation."
For the six-month period, Weight Watchers' net income increased to $104.8 million or $1.38 per share from $103.4 million or $1.31 per share in the same quarter last year.
Revenues for the period dropped to $763.1 million from $837.0 million in the same quarter last year.
Looking forward to full year 2009, the company now expects earnings in the range of $2.50 per share to $2.75 per share, compared to the previously provided forecast that was in the range of $2.52 per share to $2.70 per share.
WTW closed Thursday's trading at $27.87, down $0.12 or 0.43%, on a volume of 0.300 million shares on the NYSE.
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