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Herbalife Boosts Buyback, HLF Stock Gets a Bump

The company has been called a pyramid scheme


herbalifeOn Monday, embattled nutrition products maker Herbalife (HLF) issued a better-than-expected outlook for the December quarter and said it was increasing its share buyback program.

Herbalife estimated fourth-quarter earnings of between $1.26 and $1.30 per share of Herbalife stock. That easily topped the profit of $1.17 per share of Herbalife stock that Wall Street had anticipated. Herbalife also announced that it was raising its share buyback program from $1 billion to $1.5 billion, Reuters noted.

HLF – Herbalife Stock Looks Strong With Regulatory Scrutiny In Rearview
HLF – Herbalife Stock Looks Strong With Regulatory Scrutiny In Rearview

Sales during the fourth-quarter gained almost 20%, rising to around $1.27 billion. That also beat analysts, who had forecast Herbalife sales of $1.22 billion during the quarter.

However, Herbalife said that earnings during the current quarter would be weaker-than-expected due to currency fluctuations in Venezuela. Herbalife estimated current quarter profits of between $1.24 and $1.28 a share. That was well below the profit of $1.40 a share that analysts had predicted.

Herbalife has been hit with accusations that it is a pyramid scheme from activist investor William Ackman, prompting a tussle with billionaire Carl Icahn, who has taken a hefty stake in Herbalife.

In January, a prominent U.S. senator called for a federal investigation of Herbalife over the pyramid scheme allegations.

Herbalife stock fell modestly in Monday morning trading. HLF stock has gained more than 80% over the past twelve months.

Article printed from InvestorPlace Media,

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