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Herbalife’s income engine seems to be slowing — despite its eye-popping headline numbers.
The Los Angeles nutritional supplements company yesterday reported earnings of $1.34 per share for the second quarter — a whopping 23 percent higher than last year and far exceeding analysts’ expectations of $1.18.
The late-afternoon report sent Herbalife shares up 5.7 percent in extended-trading, to $64.04 — a new 52-week high — representing a 94 percent gain this year.
It said net sales grew a record $1.2 billion, up 18 percent over the year-earlier period.
“We reported our fifteenth quarter in a row of double-digit top-line growth, reflecting the success that our products and distribution model are having in markets around the world helping to mitigate the adverse effects of the obesity epidemic,” CEO Michael Johnson said in a statement.
Herbalife’s bottom line was much more subdued. Income before taxes grew 1.7 percent from the same period last year, to $187 million.
The difference between income and earnings per share is attributable, in part, to a 12 percent decline in shares outstanding owing to a stock buyback program.
The buybacks were initiated after investor David Einhorn first questioned Herbalife’s business practices, and they increased after hedge fund activist Bill Ackman placed a $1 billion short bet on the company in December, calling it a pyramid scheme.
The company has denied the accusation. In the report, it said it spent about $7 million during the second quarter defending itself against those attacks.
As Herbalife predicted earlier, it did not buy back any shares in the second quarter.
Herbalife, which also raised its full-year guidance, released its unaudited results after the market closed.
Before jumping after hours, shares closed at $60.57 on the New York Stock Exchange, up 3.63 percent.