Nutritional products company Herbalife Ltd. posted
adjusted quarterly profit that blew past expectations and raised its full-year
profit forecast, fueled by strong demand around the world.
Herbalife, the subject of a battle between hedge fund titans Carl Icahn and Bill
Ackman, said on April 29 that its net income was $118.9 million, or $1.10 per
share, in the first quarter, compared with $108.2 million, or 88 cents per
share, a year earlier.
Excluding a hit from the devaluation of Venezuela's currency and expenses for
defending the company from criticism by Mr. Ackman and other high-profile
investors, Herbalife earned $1.27 a share during the quarter - 20 cents more
than the average of analysts' estimates compiled by Thomson Reuters I/B/E/S.
Net sales rose 17 percent to $1.1 billion.
The Los Angeles-based company also raised its 2013 forecast for adjusted
earnings per share to a range of $4.60 to $4.80 from $4.45 to $4.65 previously.
Herbalife is a "multi-level marketer" whose products are sold through a network
of independent individuals. Mr. Ackman, whose Pershing Square Capital has a $1
billion bet against the company, has called it "a pyramid scheme" and predicted
that its shares will eventually go to zero.
The company's shares tumbled following the disclosure of Mr. Ackman's short
position last year but then rebounded.
Mr. Icahn has since become a defender of the company, taking a stake in
Herbalife and putting two representatives - Jonathan Christodoro and Keith Cozza
- on the board.
It was later discovered that a senior KPMG auditor for Herbalife was leaking
non-public information about the company in exchange for money, forcing the firm
to resign from Herbalife's service. The company also disclosed in February that
its operations have been the subject of an inquiry by the U.S. Securities and
Exchange Commission's Division of Enforcement since late last year.
Shares in Herbalife, which closed 1.3 percent higher at $38.75, edged up 0.3
percent to $38.85 in extended trading.
