What to Expect When Herbalife (HLF) Reports Second-Quarter Earnings Today

NEW YORK (TheStreet) -- Herbalife  (HLF) reports second-quarter earnings after the closing bell on Tuesday, and here's what analysts are expecting from the nutrition and weight management company.

The consensus estimate calls for Herbalife to report earnings of $1.57 a share on revenue of $1.36 billion. The company reported EPS of $1.50 in the first quarter to beat analysts' expectations of $1.30.

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Separately, 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."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 12.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Personal Products industry and the overall market, HERBALIFE LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $190.65 million or 38.52% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 12.09%.
  • The gross profit margin for HERBALIFE LTD is rather high; currently it is at 51.55%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.91% trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • You can view the full analysis from the report here: HLF Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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