Herbalife Boosts Buyback, HLF Stock Gets a Bump

by Christopher Freeburn | February 3, 2014 11:43 am

Herbalife Boosts Buyback, HLF Stock Gets a Bump

herbalife 300x224 Herbalife Boosts Buyback, HLF Stock Gets a Bump[1]On Monday, embattled nutrition products maker Herbalife (HLF[2]) issued a better-than-expected outlook for the December quarter and said it was increasing its share buyback program[3].

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.

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[4], 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[5].

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

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2013/02/herbalife.jpg
  2. HLF: http://studio-5.financialcontent.com/investplace/quote?Symbol=HLF
  3. increasing its share buyback program: http://in.reuters.com/article/2014/02/03/herbalife-results-idINL3N0L825N20140203
  4. prompting a tussle with billionaire Carl Icahn: http://investorplace.com/2013/02/herbalife-a-4-billion-ego-soaked-cockfight/#.Uu_FYXlhOf0
  5. federal investigation of Herbalife over the pyramid scheme allegations: http://investorplace.com/2014/01/hlf-stock-herbalife/#.Uu_F4nlhOf0

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