* Fourth-quarter earnings $1.05/share vs est $1.03
* Fourth-quarter sales $1.06 bln vs est $1.05 bln
* Sees full-year earnings $4.45-$4.65/share vs est $4.64
By Siddharth Cavale and Arpita Mukherjee
Feb 19 Herbalife Ltd, the diet
supplements company that has become a battleground for Wall
Street titans William Ackman and Carl Icahn, raised its 2013
earnings forecast on Tuesday.
The company also revealed in a regulatory filing the staff
of the Security and Exchange Commission's Division of
Enforcement has been inquiring about the company's operations
The company, which sells products through a network of
independent distributors, has come under intense scrutiny from
Pershing Capital Management's Ackman, one of the world's most
closely watched hedge fund managers, who in December revealed a
short position in the stock and called the business "a pyramid
Herbalife said it contacted the regulator following Ackman's
allegations and that it would fully cooperate with the
Ackman had argued that the company is an unsustainable
scheme because distributors earn more than 10 times as much from
recruitment as they do by selling its products.
The company has refuted the allegations and said a majority
of its distributors join Herbalife just to get a discount on the
products rather than to earn money.
Shares of the company, which tumbled dramatically after
Ackman's allegations, have more than recovered their losses. The
stock also got a boost after Icahn and another hedge fund
manager, Daniel Loeb, revealed long positions in the company.
Icahn revealed a 13 percent ownership stake last week, while
Loeb took an 8.2 percent stake in the company earlier this year.
Herbalife shares were down marginally in trading after the
bell on Tuesday after closing at $39.74 on the New York Stock
The company raised its earnings outlook to $4.45 to $4.65
per share for the full year, from $4.40 to $4.55 per share. Wall
Street analysts were expecting $4.64 per share.
The forecast, however, excludes $10 million to $20 million
in legal and other costs to respond to Ackman's attacks on the
company as well as the impact of the devaluation of the
The company's fourth-quarter income rose to $117.8 million,
or $1.05 per share, from $105.4 million, or 86 cents per share,
a year earlier.
Revenue rose about 20 percent to $1.06 billion, slightly
above Wall Street's expectations of $1.03 billion.
Sales in Asia Pacific, which is the largest revenue
generator for Herbalife, rose 19 percent to $295.2 million in