By Lisa Baertlein
April 29 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
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
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
"The resilience of our customer base and our distributor
base will continue to show that he's wrong and dead wrong,"
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
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