Nu Skin Enterprises Q2 Profit Down, Misses View; Warns On H2 - Quick Facts

(RTTNews) - Nu Skin Enterprises, Inc. (NUS), a maker of personal care products and dietary supplements, reported Wednesday that its second-quarter net income plunged to $19.51 million or $0.32 per share from $74.44 million or $1.22 per share last year.

Earnings per share were impacted by a $50 million write-down of Mainland China inventory, and a $25 million charge due to a transition to the SICAD II exchange rate in Venezuela. Excluding these items, earnings per share would have been $1.13 per share for the latest second quarter.

On average, seven analysts polled by Thomson Reuters expected earnings of $1.27 per share. Analysts' estimates typically exclude special items.

Nu Skin's second-quarter revenue was $650.03 million, a 3 percent decline from last year's $671.33 million. Revenue was negatively impacted 2 percent by foreign currency fluctuations. Analysts expected revenues of $709.03 million.

The company's operating margin was 8.4 percent for the quarter, compared to 17.1 percent in 2013. Gross margin was 76 percent, versus 83.4 percent in the prior-year period. Operating and gross margins were negatively impacted due to the China inventory charge.

Looking ahead for the third quarter, the company anticipates that revenue will be in the $620 million to $640 million range with earnings per share of $0.90 to $0.95. Analysts expect revenues of $847.46 million and earnings per share of $1.68 for the third quarter.

The company expects fourth-quarter revenue to be in the $650 million to $675 million range with earnings per share of $1.00 to $1.05.

Truman Hunt, president and chief executive officer, said, "In the second half of 2013, we generated approximately $560 million of sales volume from the LTO launch of our TR90 weight management system. This significant sales event, combined with the temporary cessation of marketing activities in China in the first half of this year, will raise difficult comparisons in the second half of 2014. However, now that some China marketing activities have resumed, we are pleased to be seeing stabilizing trends in China."

In pre-market activity, Nu Skin shares were losing $9.42 or 16.26 percent, and trading at $48.50.