Herbalife (HLF) Rises After Fourth-Quarter Estimates Beat Expectations

NEW YORK (TheStreet) -- Herbalife  (HLF) rose 7.22% to $69.02, up $4.65 from its previous close of $64.37, at the close of the trading day on Monday after the nutrition company announced fourth-quarter estimates for profits and sales above analysts' predictions.

The company also announced it had increased its share repurchase program by $500 million to $1.5 billion.

Herbalife reported Monday it earned between $1.26 and $1.30 a share, excluding items, for the fourth quarter that ended on Dec. 31. Analysts had expected profit of $1.17 a share, according to Thomson Reuters I/B/E/S. Fourth-quarter sales also rose approximately 19.8%, which equates to approximately $1.27 billion. Analysts had expected $1.22 billion.

The news was not all good, though, as the company forecast first-quarter profit of $1.24 to $1.28 a share and claimed the weak Venezuelan bolivar had hurt its earnings. Analysts expected $1.40 a share.

Investor William Ackman also created a new Web site to claim that Herbalife is a pyramid scheme, a belief he has held for quite some time. He claimed on this new site that Herbalife found new distributors through a business that had been convicted in Canada a decade ago of running an illegal pyramid scheme.

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 several positive factors, 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 robust revenue growth, solid stock price performance, impressive record of earnings per share growth, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

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