Herbalife Swings to Loss but Boosts Outlook

Herbalife Inc. swung to second-quarter loss, hurt by a settlement with the Federal Trade Commission, but earnings excluding items were above the company's projections.

Herbalife also increased its full-year adjusted earnings guidance again.

Shares rose 2.6% to $68.80 in after-hours trading.

Last month, Herbalife agreed to pay $200 million in a settlement that requires significant changes to its business practices but allows the nutritional-products company to avoid being classified as a pyramid scheme.

This was a victory for Herbalife in its long-running battle with activist investor William Ackman, who has called Herbalife a "criminal enterprise."

However, the FTC harshly criticized Herbalife's operations and said the company will need to improve disclosures about its distributors and sales.

Herbalife projects full-year earnings excluding items of $4.50 to $4.80 a share, up from May guidance of $4.40 to $4.75. It reaffirmed its outlook for sales growth of 1.5% to 4.5%.

For the third quarter, it expects earnings excluding items of 98 cents to $1.08 a share.

Over all, Herbalife reported a loss of $22.9 million, or 28 cents a share, compared with net income of $82.8 million, or 97 cents a share, a year earlier. Earnings excluding items to rose to $1.29 a share from $1.24.

Sales rose 3.4% to $1.2 billion. Excluding the impact of currency, sales grew 10%.

Herbalife had projected earnings excluding items of $1.10 to $1.20 a share and sales growth of up to 3%.

Write to Josh Beckerman at [e-mail]

(END) Dow Jones Newswires

August 03, 2016 18:15 ET (22:15 GMT)

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