Herbalife antagonist Bill Ackman must be smiling.
The nutritional supplements company he has bet $1 billion is a fraud broke Wall Street hearts Monday for the first time in more than five years.
Los Angeles-based Herbalife broke a 21-quarter record of besting analysts’ expectations when it reported a 16.6 percent decline in second-quarter profits compared to last year.
Adjusted net income came in at $141.4 million, or $1.55 per diluted share. Wall Street was expecting $1.56 per diluted share.
Net income fell 16.6 percent, to $119.5 million.
The results — along with flat sales and a move that lowered profits forecasts for the rest of the year — knocked the wind from Herbalife’s shares, as they fell to as low as $59.60, down 11.7 percent, in after-hours trading.
At that point, Herbalife gave back all of the huge run-up that Ackman’s much-derided and longwinded presentation on nutrition clubs afforded Herbalife last week.
The stock was below the level it traded when The Post reported first, on July 16, that Ackman would try to take down the clubs as another aspect of the fraud.
“[Herbalife CEO] Michael Johnson just broke the cardinal rule — do not disappoint Wall Street,” said Matt Stewart, a Herbalife investor known for shorting the stock.
Herbalife’s adjusted net income doesn’t include the costs associated with the investigations by the Federal Trade Commission into pyramid scheme allegations or money spent to beat back Ackman. Herbalife denies that it is a pyramid scheme.
After taxes, it spent $5.6 million fighting Ackman and $3.1 million on the FTC probe.
Johnson downplayed the disappointment, saying the company “once again delivered strong results in profitability.”
The misstep in earnings per share was notable since the company spent $581.3 million buying back almost 10 percent of the stock.