UPDATE 2-Herbalife says results will prove Ackman wrong
April 29 (Reuters) - Herbalife Ltd posted surprisingly strong quarterly earnings and raised its full-year profit forecast on Monday, putting pressure on high-profile investor Bill Ackman, who is betting against the nutritional products company.
Ackman's Pershing Square Capital has a $1 billion bet against the "multi-level marketer" whose weight loss products are sold through a network of independent individuals. In recent months Ackman has called the Los Angeles-based company "a pyramid scheme" and predicted that its shares will eventually be worthless.
Herbalife executives, who have been befriended by hedge fund titan Carl Icahn, told Reuters that the company's global growth speaks for itself.
"The proof is in the results. Ultimately people will realize that Bill Ackman's reckless bet is based on an unfounded hypothesis," Herbalife President Des Walsh told Reuters in an interview.
"The resilience of our customer base and our distributor base will continue to show that he's wrong and dead wrong," Walsh said.
Herbalife's first quarter net income grew to $118.9 million, or $1.10 per share, in the first quarter, compared with $108.2 million, or 88 cents per share, a year earlier.
Excluding a hit from the devaluation of Venezuela's currency and expenses related to defending the company from criticism by Ackman and other high-profile investors, the company earned $1.27 a share during the quarter - 20 cents more than the average of analysts' estimates compiled by Thomson Reuters I/B/E/S.
Net sales rose 17 percent to $1.1 billion.
Based on those results, Herbalife raised its 2013 forecast for adjusted earnings per share to a range of $4.60 to $4.80 from $4.45 to $4.65 previously.
Herbalife shares, which have been volatile due to the debate over its future, slipped 0.9 percent to $38.42 in extended trading. The shares plummeted from about $45 to about $25 at the time of Ackman's attack in December.
Icahn, another closely watched investor, rushed to the firm's defense - taking a stake and putting two representatives on the Herbalife board in February.
But the company also disclosed in February that its operations have been the subject of an inquiry by the U.S. Securities and Exchange Commission's Division of Enforcement since late last year.
It was later discovered that a senior KPMG auditor for Herbalife was leaking nonpublic information about the company in exchange for money, forcing the firm to resign from Herbalife's service.