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TheStreet Open House

Why Herbalife (HLF) Stock Is Falling Today

NEW YORK (TheStreet) -- Shares of Herbalife (HLF) are down -11.83% to $59.50 in pre-market trade after the nutrition company reported second quarter profit below Wall Street's expectations, the first time since 2008 that Herbalife missed estimates, the Wall Street Journal reports.

Second quarter earnings on an adjusted basis were $1.55 per share, 1 cent  below analysts' expectations. The company reported revenue of $1.31 billion.

Analysts polled by Thomson Reuters expected Herbalife to report second quarter earnings of $1.56 a share on revenue of $1.36 billion.

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For the third quarter, the company forecast earnings of adjusted basis between $1.49 and $1.53 per share on revenue up 9% to 11% from a year ago.

Analysts expected per share profit of $1.62 and revenue growth of 11% to $1.34 billion.

Herbalife reported a profit of $119.5 million, or $1.31 per share, down from $143.2 million, or $1.34 per share, a year earlier.

Excluding expenses incurred to respond to attacks on the company's business model and a FTC inquiry, convertible note accounting impacts and other items, adjusted earnings rose to $1.55 from $1.41. Revenue increased 7.1% to $1.31 billion, the Journal noted.

Herbalife yesterday said it repurchased $581 million, or 9.8 million shares, in the second quarter, as was expected. The comopany said that there is $232.9 million remaining on its existing $1.5 billion share repurchase authorization.

TheStreet Ratings team rates HERBALIFE LTD as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HERBALIFE LTD (HLF) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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