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Herbalife Raises Outlook After Big Stock Buyback

February 19, 2014

Associated Press

NEW YORK (AP) Herbalife raised its 2014 net income guidance Tuesday after buying back hundreds of millions in stock.

Earlier this month the Los Angeles company increased its stock buyback program by $500 million. Share repurchases help support per-share earnings, and Herbalife now expects adjusted profit of $5.85 to $6.05 per share in 2014.

But the nutritional products seller sees sales rising 7.5 to 9.5 percent in 2014, or to about $5.19 billion to $5.28 billion, down from its October forecast of 9 to 11 percent growth.

FactSet says analysts expect net income of $5.87 per share and $5.31 billion in revenue.

Herbalife, which uses a network of distributors to sell its nutritional supplements and weight-loss products, has faced scrutiny over its business model. Hedge fund manager William Ackman has bet against the company, saying it operates a pyramid scheme. Ackman's rival, Carl Icahn, disagrees and has invested in the company. Herbalife has denied Ackman's allegations.

In the fourth quarter, Herbalife's profit rose 10 percent to $123.5 million, or $1.15 per share. Excluding one-time items, earnings came to $1.28 per share, while grew 20 percent to $1.27 billion. Herbalife's results were about equal to a forecast it gave earlier this month.

Shares of Herbalife Ltd. gained $1.03, or 1.5 percent, to $79.96 aftermarket. The stock has gained 78 percent over the past 12 months.

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Original headline: Herbalife raises profit outlook, cuts sales view


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