Courtesy of Benzinga.
Herbalife (NYSE: HLF) released its fiscal second-quarter earnings results after the closing bell on Monday.
The company easily topped Wall Street earnings per share and revenue expectations. The company also provided guidance for the upcoming third-quarter and lifted its full-year outlook. In late trading, the stock was last up around six percent to $64.16.
Herbalife has been the subject of an intense battle between investment titans Carl Icahn and Bill Ackman, who runs hedge fund Pershing Square Capital Management. In December, Ackman revealed that his fund was short roughly 20 million shares of the multi-level marketer. It is believed his cost basis was around $50 per share.
In February, Carl Icahn disclosed a 12.98 percent stake in Herbalife and criticized Bill Ackman’s short thesis on the company. Icahn further upped his stake in May 2013 to 16.50 percent of the company. Benzinga estimates that in Monday’s after-hours trading session alone, Ackman’s Pershing Square has lost around $72.8 million while Icahn has made $61.8 million.
In total, it is believed that Pershing Square is sitting on a roughly $280 million paper loss on its Herbalife short position, assuming that the oft-cited $50 cost basis on the trade is correct. For his part, Icahn recently disclosed at the Delivering Alpha Conference in New York on July 17 that he is sitting on a roughly $250 million profit on his Herbalife trade.
Management Commentary
“We reported our fifteenth quarter in a row of double digit top-line growth, reflecting the success that our products and distribution model are having in markets around the world helping to mitigate the adverse effects of the obesity epidemic. The second quarter record results for volume point and net sales were driven by the ongoing engagement of our distributors and consumer demand for our weight loss and nutrition products worldwide,” said Michael O. Johnson, Herbalife’s chairman and CEO.
Fiscal Q2 Results
Herbalife reported net income of $143.16 million or $1.34 per share, compared to $131.95 million or $1.09 per share, in last year’s corresponding period.
On an adjusted basis, net income was $150.73 million or $1.41 per share. This came in well ahead of Wall Street analysts’ consensus EPS estimates of $1.18.
Revenue in the quarter was up 18 percent to $1.22 billion from $1.03 billion a year ago. This also easily topped analysts’ consensus sales estimates of $1.16 billion.
Related: Review all of Monday’s trading action with Benzinga’s Market-Wrap.
Q3 and Full-Year Guidance
Looking ahead to Q3, Herbalife said it expects adjusted earnings per share of $1.09 to $1.13 on sales growth of 16.5 percent to 18.5 percent. Currently, analysts are modeling EPS of $1.16 on revenue growth of 13.30 percent.
For the full-year, the company raised its guidance. Herbalife now expects earnings per share of $4.83 to $4.95 on sales growth of 16 percent to 18 percent. This compares to analysts’ consensus estimates calling for EPS of $4.80 on revenue growth of 13.50 percent for the full-year.
Previously, Herbalife guided for full-year earnings per share of $4.60 to $4.80 on sales growth of 13 percent to 15 percent.
