Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
After doing little more than “hanging around” most of 2012 (trading between a range of $57 and $60 most of the year), speculators piled in Herbalife (HLF) yesterday ahead of earnings. While this is not my way of doing things since we get random outcomes on earning reports, it has served the speculator class quite well this quarter as most stocks seem to be rallying on earnings even if the data is not that good. That said, Herbalife reported a very nice quarter — while I found guidance to be somewhat lacking for a ‘high growth’ company, the market seems quite pleased.
Herbalife is much like Las Vegas Sands and Cummins and a few other companies in that it is a play on global growth disguised as an American stock. Note how much growth is coming out of Asia (and even Latin America). Full report here.
Via AP:
- Herbalife Ltd. said Tuesday its profit grew 22 percent in the fourth quarter on steep sales gains, especially overseas, and the nutrition and weight loss company said it expects greater profit and revenue in 2012. Herbalife reported a quarterly profit of $105.4 million, or 86 cents per share, up from $86.3 million, or 69 cents per share, in the fourth quarter of 2010. Revenue increased 20 percent, to $844.6 million from $738.4 million as the company’s sales improved in all regions.
- Analysts expected Herbalife to report a smaller profit of 72 cents per share on revenue of $857.3 million, according to FactSet.
- Herbalife said its sales in North America grew 18 percent to $165.7 million. Revenue in the Asia Pacific region jumped 31 percent to $247 million, and revenue from South and Central America rose 28 percent to $155.4 million.
- In 2011 Herbalife’s profit rose 38 percent, to $412.6 million, or $3.30 per share, from $299.2 million, or $2.37 per share. Its revenue grew 26 percent, to $3.54 billion from $2.73 billion.
- The company now expects a profit of $3.40 to $3.60 per share in 2012, and said its revenue will grow 9 to 11 percent, which suggests total sales of $3.77 billion to $3.83 billion. Previously Herbalife projected income of $3.25 to $3.45 per share, and it said revenue would rise 8 to 10 percent.
- Included in the forecast is an expected profit of 76 to 80 cents per share in the first quarter. Herbalife said its quarterly revenue should grow 10 to 12 percent, implying a total of $874.6 million to $890.5 million.
- Analysts expect Herbalife to report a profit of $3.47 per share and $3.75 billion in revenue for the year, including 78 cents per share on $867.5 million in revenue in the first quarter.
2012 guidance shifting downward to only 9-11% growth would appear to be a worry to me, but perhaps this is a very low bar they have set so they can beat it easily. We’ll see later in the year.
Disclosure Notice
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
