The long-running Wall Street soap opera known as
) reported earnings for its fiscal 4th quarter after the bell
Tuesday. Both earnings and revenues came in-line with Zacks
Consensus Estimates, but what's driving HLF shares higher in the
after market is its fiscal year earnings guidance, which has been
raised to $5.85 - $6.05 per share -- well above our consensus of
Revenues of $1.27 billion in the quarter matched the Zacks
estimate exactly, as did earnings per share of $1.28. These
numbers had been bumped northward following Herbalife's
preliminary guidance a couple weeks ago, which did not at the
time see much love from investors upon the update. Some observers
found this a bit strange, however, especially seeing Herbalife
increased its share buyback program to $1.5 billion, which was
50% higher than was expected.
Herbalife is, however, seeing some love now: HLF was up 3.8%
prior to the earnings announcement in regular-day trading, and
it's up another 2.4% as of this moment.
Shares of HLF fell three weeks ago amid the continued controversy
regarding its business model as an unsafe investment by Senator
Ed Markey (D-MA), following the insistent table-pounding from
activist investor Bill Ackman that Herbalife is a "pyramid
scheme." Herbalife endured an audit in mid-December 2013 and came
out with a clean bill of health. This didn't stop Ackman from
writing as letter to Herbalife investors about the company's
"improper" sales recruiting methods inflating sales figures.
For an excellent and comprehensive -- if completely pro-biased --
account of this and many other aspects of the story surrounding
this Zacks Rank #2 (Buy) company, please read Zacks Aggressive
Growth Strategist Brian Bolan's
Bull of the Day article from January 24, 2014
-- one day after shares fell 10% on Sen. Markey's actions
inquiring to the SEC and FTC regarding Herbalife's operations.
Herbalife's business model is not as straightforward as some, but
it isn't one-of-a-kind, either. Multi-level marketing companies
) all rely or had previously relied on recruitment of sales reps
to sell their products. Herbalife, which specializes in
nutritional supplies, seems to have precedent on its side... at
least for the moment. Stay tuned!
AVON PRODS INC (AVP): Free Stock Analysis
HERBALIFE LTD (HLF): Free Stock Analysis
NORTHEAST UTIL (NU): Free Stock Analysis
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