Herbalife Q4 Profit Up 18%, But Outlook Disappoints; Forms JV With China's Tasly

(RTTNews) - Herbalife Ltd. (HLF) reported an 18 percent increase in profit for the fourth quarter from last year as a decline in revenues was more than offset by lower costs and expenses. However, the company forecast earnings for the first quarter and fiscal 2017 below analysts' expectations.

The nutritional supplements company also said its board has approved a new three-year $1.5 billion share buyback program. The company has also reached an agreement in principle to form a joint venture with China's Tasly Holding Group.

Fourth-quarter net income was $99.4 million or $1.16 per share, up from $84.5 million or $0.98 per share in the year-ago period.

Adjusted earnings for the quarter were $1.00 per share, compared to $1.17 per share for the comparable quarter in 2015. On average, analysts polled by Thomson Reuters expected the company to earn $0.97 per share for the quarter. Analysts' estimates typically exclude special items.

The reported and adjusted earnings for the quarter include an $0.11 negative impact due to currency fluctuations.

Net sales for the quarter were $1.05 billion, down 4.5 percent from $1.10 billion in the prior-year period. Analysts' consensus revenue estimate was $1.05 billion.

Looking ahead to the first quarter, Herbalife forecast adjusted earnings per share of $0.75 to $0.95 on net sales decline of 9.0 percent to 5.0 percent. The Street expects earnings of $1.29 per share on revenues of $1.12 billion.

For fiscal 2017, Herbalife forecast adjusted earnings per share of $3.65 to $4.05 on net sales growth of 0.3 percent to 3.3 percent. Analysts expect earnings of $5.00 per share for the year on revenues of $4.55 billion.

In a separate statement, Herbalife said it has reached an agreement in principle to form a joint venture with Tasly Holding Group, a Traditional Chinese Medicine or TCM health products and services corporation.

The joint venture would develop and commercialize consumer health products based on Tasly's portfolio of proprietary formulations, patents, know-hows, and clinical studies to bring products to a global market through the Herbalife Nutrition distributor network.

The proposed joint venture furthers the Herbalife Nutrition business plan to expand its product range globally. The joint venture is expected to be finalized within the next 60 days.

HLF closed Thursday's trading at $59.40, down $1.34 or 2.21 percent on a volume of 2.74 million shares.