Herbalife Ltd. Second Quarter Earnings Sneak Peek

Herbalife Ltd. (NYSE:HLF) will unveil its latest earnings on Monday, July 30, 2012. Herbalife is a marketing company that sells weight management, nutritional supplement, energy, sports and fitness products and personal care products.

Herbalife Ltd. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 96 cents per share, a rise of 9.1% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 95 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 96 cents during the last month. Analysts are projecting profit to rise by 14.8% compared to last year’s $3.80.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 7 cents, reporting profit of 88 cents per share against a mean estimate of net income of 81 cents per share.

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Stock Price Performance: Between April 27, 2012 and July 24, 2012, the stock price fell $21.78 (-30.9%), from $70.47 to $48.69. It saw one of its worst periods between July 5, 2012 and July 12, 2012 when shares fell for six straight days, dropping 8% (-$4.11) over that span. The stock price saw one of its best stretches over the last year between February 14, 2012 and February 22, 2012, when shares rose for six straight days, increasing 12.4% (+$7.39) over that span.

A Look Back: In the first quarter, profit rose 23.5% to $108.2 million (88 cents a share) from $87.6 million (71 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 21.3% to $964.2 million from $795.1 million.

Wall St. Revenue Expectations: On average, analysts predict $979 million in revenue this quarter, a rise of 11.3% from the year-ago quarter. Analysts are forecasting total revenue of $3.93 billion for the year, a rise of 13.9% from last year’s revenue of $3.45 billion.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 24.7% over the last four quarters.

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 42.6% in the third quarter of the last fiscal year and 30.1% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Analyst Ratings: With 11 analysts rating the stock a buy, none rating it a sell and none rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.49 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.4 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in current assets. Current assets increased 9.9% to $845 million while liabilities rose by 3.1% to $565.8 million.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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