Herbalife Ltd. Earnings Cheat Sheet: Beats the Street on Profit Rise

Herbalife Ltd. (NASDAQ:HLF) reported net income above Wall Street’s expectations for the second quarter. Herbalife, Ltd is the marketing company that sells weight management, nutritional supplement, energy, sports and fitness products and personal care products. Herbalife was selected as a Wall St. Cheat Sheet July Premium Feature Stock Selection>>

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Herbalife Earnings Cheat Sheet for the Second Quarter

Results: Net income for the drug company rose to $111.2 million (88 cents per share) vs. $82.2 million (65 cents per share) in the same quarter a year earlier. This marks a rise of 35.2% from the year earlier quarter.

Revenue: Rose 27.7% to $879.7 million from the year earlier quarter.

Actual vs. Wall St. Expectations: HLF beat the mean analyst estimate of 75 cents per share. It beat the average revenue estimate of $829.9 million.

Quoting Management: “We believe that we are just getting started,” said Michael O. Johnson, the company’s chairman and CEO. “Eight consecutive quarters of growth in the average number of sales leaders ordering illustrates the engagement of the distributors and the strong foundation being built as Herbalife helps consumers tackle the global issues of obesity.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 21.7%, with the biggest boost coming in the first quarter when revenue rose 28.5% from the year earlier quarter.

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.4 percentage point to 80.6% from the year earlier quarter. Over that span, margins have grown on average 1.7 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 68.8% and in the fourth quarter of the last fiscal year, the figure rose 45.5%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 10 cents in the first quarter, by 9 cents in the fourth quarter of the last fiscal year, and by 7 cents in the third quarter of the last fiscal year.

Competitors to Watch: Nu Skin Enterprises, Inc. (NYSE:NUS), USANA Health Sciences, Inc. (NASDAQ:USNA), Avon Products, Inc. (NYSE:AVP), Nature’s Sunshine Prod. (NASDAQ:NATR), The Estee Lauder Companies Inc. (NYSE:EL), Alberto-Culver Company (NYSE:ACV), Mannatech, Inc. (NASDAQ:MTEX), Walgreens (NYSE:WAG), CVS (NYSE:CVS), Wal-Mart (NYSE:WMT), Target (NYSE:TGT) and Reliv International, Inc (NASDAQ:RELV).

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(Source: Xignite Financials)