Jan 17 (Reuters) - Weight loss products company Herbalife Ltd reported preliminary fourth-quarter earnings above analysts’ estimates and said it expects to restart its share buyback program after being hounded by activist hedge fund manager William Ackman.
The company also said it expected a temporary increase in expenses, associated with “recent events”. Its shares were down nearly 3 percent premarket on Thursday.
Ackman has called Herbalife’s direct business model a “pyramid scheme” because distributors earn more than 10 times as much from recruitment as from selling the company’s products.
Shares slid nearly 39 percent in the days following news that Ackman’s Pershing Square Capital Management had a short position in Herbalife valued at about $1 billion. They have since more than recovered, helped by news that another prominent investor, Daniel Loeb, took a stake of more than 8 percent.
Herbalife expects fourth-quarter earnings to rise to between $1.02 and $1.05 per share, from 86 cents per share a year earlier.
Analysts on average were expecting $1.01 per share, according to Thomson Reuters I/B/E/S.
Sales are expected to rise about 20 percent.
The company has said it plans to repurchase shares worth $950 million.
It will report results on Feb. 19.