Hain Celestial fiscal 3Q revenue and profit up

LAKE SUCCESS, N.Y. (AP) — The Hain Celestial Group Inc. reported major profit gains in its fiscal third quarter on stronger sales, but the company issued a weak full-year forecast.

Shares fell in after-hours trading Thursday.

Hain Celestial earned $ 40.7 million, or 85 cents per share, for the quarter that ended March 31. That compares with $ 24.1 million, or 52 cents per share, earned last year. It made 72 cents per share on an adjusted basis, excluding one-time items.

Total revenue increased 21 percent to $ 456.1 million.

Analysts expected 72 cents per share on revenue of $ 480.2 million, according to FactSet.

Hain Celestial benefited from recent acquisitions in the United Kingdom but also saw revenue gains around the world.

The Lake Success, N.Y.-based company expects to earn $ 2.43 to $ 2.47 per share for the year on revenue around $ 1.73 billion. Analysts forecast $ 2.46 per share on revenue of $ 1.74 billion.

The company also announced that it is buying organic baby food maker Ella’s Kitchen Group Ltd. for an undisclosed amount and creating a global infant, toddler and kids division in the U.S. Paul Lindley, founder of Ella’s Kitchen, will be CEO of the division.

Ella’s Kitchen, which sells baby food in flexible pouches, generated approximately $ 70 million revenue last year. The deal is expected to add 5 to 8 cents per share to the company’s earnings in 2014.

Hain Celestial shares fell $ 2, about 3 percent, to $ 63.50 in after-hours trading.


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HERBALIFE BEATS EARNINGS AND REVENUE ESTIMATES, BOOSTS FORECAST

herbalife traders

REUTERS/Brendan McDermid

Herbalife’s Q1 2013 earnings are out.

Adjusted earnings per share came in at $ 1.27, better than the $ 1.06 expected by analysts.

Revenues came in at $ 1.12 billion, in line with company guidance but slightly above analysts’ estimates for $ 1.11 billion in sales.

The company also raised full-year 2013 earnings guidance to a range of $ 4.60-4.80 per share. Analysts were expecting $ 4.66.

Shares are up slightly in after-hours trading.

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Below is the text from the release:

LOS ANGELES–(BUSINESS WIRE)–

Herbalife Ltd. (HLF) today reported first quarter net sales of $ 1.1 billion, reflecting an increase of 17 percent compared to the same time period in 2012 on volume point growth of 13 percent. Adjusted1 net income for the quarter of $ 137.4 million, or $ 1.27 per diluted share, compares to 2012 first quarter net income of $ 108.2 million and EPS of $ 0.88, respectively. On a reported basis, first quarter 2013 EPS of $ 1.10 increased 25 percent compared to the $ 0.88 reported in the comparable quarter last year.

“We continue to deliver record results in sales and profitability as our independent distributors successfully execute numerous growth strategies that enable deeper market penetration, developing customers using our weight management and targeted nutrition products every day,” said Michael O. Johnson, Herbalife’s chairman and CEO. “Obesity and poor nutrition are global public health problems. Our distributors are proud to be part of the solution.”

For the quarter ended March 31, 2013 the company generated cash flow from operations of $ 137.6 million, an increase of 14 percent compared to 2012; paid dividends of $ 30.9 million; invested $ 24.9 million in capital expenditures; and repurchased $ 162.4 million in common shares outstanding under our share repurchase program.

Herbalife is arguably one of the most embattled stocks in America as multiple hedge fund titans square off over its future.

On one side is Bill Ackman, who released a massive, 342-slide presentation in December arguing that the company was a Ponzi scheme and that shares would go to $ 0. Ackman describes his hedge fund’s short position in Herbalife as “enormous.”

On the other side are activist investor Carl Icahn and hedge fund manager Dan Loeb, who both decided to invest in the stock after Ackman went public with his short call.

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Chevron U.S. revenue weak

The energy giant said Q1 EPS fell 2.8% to $ 3.18, beating views by 10 cents. U.S. upstream earnings, which include drilling and exploration, fell 26% to $ 1.13 bil on lower crude oil prices and higher operating expenses. Int’l upstream earnings rose 4% to $ 4.8 bil on lower exploration. Chevron’s (CVX) U.S. downstream results, which include revenue from refining and marketing, fell more than 70%. Work on a refinery in Miss. and a fire at a refinery in Richmond, Calif., hit results. Shares rose 1.3% to 120.04.


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S&P 500 Q1 Revenue Likely Fell, Bad Sign For Earnings Outlook

Corporate revenue has stagnated amid a sluggish U.S. and global economy, raising doubts about the sustainability of earnings growth that’s already languishing in the low-single digits.

With a little more than half of S&P 500 earnings tallied through Friday, analysts now expect first-quarter revenue to decline 0.3% while earnings rise 3.9%.

“That suggests low-quality earnings that are coming more from cost-cutting than growth in their underlying businesses,” said Greg Harrison, a research analyst at Thomson Reuters. “A lot of them are suspect quality.

That would be the second S&P 500 sales drop in three quarters, falling 0.8% in Q3, according to Thomson Reuters data. Earnings rose just 0.1% that quarter.

But before that, revenue had climbed since just after the U.S. exited the last recession in 2009.

Meanwhile, earnings are coming in better than forecast. Estimates for bottom-line growth were as low as 1.5% on April 1, just after the quarter ended.

Sixty-nine percent have so far beat analysts’ earnings targets, but more than half have missed sales projections, Harrison said.

The energy sector — especially oil and gas firms — are leading the sales decline amid weaker demand and prices with a 16.7% fall-off in revenue.

Chevron (CVX) topped profit forecasts Friday, but revenue fell 6%, missing. It was a similar story Thursday for Exxon Mobil (XOM).

Materials sector revenue is seen slipping 1.7%.

Industrial sector revenue is seen edging up just 0.2%. General Electric (GE) and Honeywell (HON) both reported flat Q1 sales.

Technology is expected to climb 4.2%, though without the sales boost from battered giant Apple (AAPL), that group’s sales would grow just 3%.

Even the consumer — the bulwark of this recovering economy — is pinching more pennies. Analysts expect 5.5% sales growth for the consumer discretionary sector, including many homebuilders and automakers. But that’s well shy of the group’s 10.5% 10-year average. Consumer staples are now seen rising 1.9% vs. a 6.6% 10-year average.

Hugh Johnson, chairman of Hugh Johnson Advisors, said results have been mixed but are lagging his forecasts.

“When you look back at the quarter, you’re going to come away and say this is a bad one,” he said.

Analysts have a slightly rosier picture for Q2, expecting 4.4% earnings growth on a 2.9% sales uptick. But those figures have been coming down as corporate chiefs issue lukewarm guidance.

Sales and earnings should rebound in the back half of the year, Johnson said.

As for CEOs’ cautious comments, “I’m not sure I take those very seriously anymore,” he said.

Q1 earnings season is far from over. Facebook (FB), Comcast (CMCSA), Visa (V) and MasterCard (MA) report Wednesday. Kellogg (K) and Kraft Foods (KRFT) are on tap Thursday.


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AT&T revenue disappoints as it loses cellphone subscribers

By Sinead Carew

NEW YORK (Reuters) – AT&T Inc reported a net loss of cellphone subscribers in the first quarter as it lost market share to bigger rival Verizon Wireless, sending its shares down about 2 percent.

As a result AT&T’s revenue missed Wall Street expectations as its subscriber growth was driven by tablet computer users who pay lower monthly fees than phone users.

Since most U.S. consumers already have smartphones, the No. 2 U.S. mobile service provider and its rivals are rushing to put wireless connections in everything from tablet computers and consumer electronics to medical devices and home security systems.

But while customers with devices like tablets are less costly to attract than smartphone users, which require hefty subsidies, tablet customers bring in less revenue, raising analyst concerns about AT&T’s prospects for top-line growth.

“It’s going to take so many connected devices to make up for losing a phone subscriber,” said Nomura analyst Michael McCormack, adding that slowing phone customer growth is also a concern for smaller rivals such as Sprint Nextel and T-Mobile USA, a unit of Deutsche Telekom.

AT&T maintained its target for 2013 overall revenue growth of 2 percent and said it still expects net additions of phone customers for the full year due to a boost in sales in launch quarters for popular phones like Apple Inc’s iPhone.

But Susan Johnson, senior vice president for investor relations, said other devices would be increasingly important.

“It’s not just about smartphones any more,” Johnson told Reuters in an interview on Tuesday after the company’s quarterly conference call during which analysts peppered executives with questions about the net loss of phone customers.

AT&T said it added 296,000 subscribers in the quarter, ahead of Wall Street expectations for just over 195,000, according to six analysts contacted by Reuters. But this included a net addition of 365,000 subscribers using tablet computers, implying a net loss of 69,000 higher-value phone subscribers.

In comparison its bigger rival Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc, said last week that it added 677,000 subscribers in the first quarter.

Sprint, the No.3 U.S. mobile service provider, is scheduled to report its quarterly earnings on Wednesday.

Nomura’s McCormack said AT&T’s 0.9 percent growth in average monthly revenue per user (ARPU) missed his expectation for 1.9 percent growth.

“The concern’s going to be how we should be thinking about ARPU going forward,” the analyst said.

AT&T’s revenue fell to $ 31.36 billion from $ 31.82 billion in the year-ago quarter, before the company sold its telephone directory business. Analysts, on average, had expected revenue of $ 31.74 billion, according to Thomson Reuters I/B/E/S.

While AT&T’s wireless profitability was better than analysts expected, McCormack said that a 29.5 percent profit margin for its wireline business missed his expectation for 30.4 percent.

AT&T Chief Financial Officer John Stephens told analysts on the conference call that the wireline business was hurt by weak demand from business and customers who are slowing spending due to concerns about the economy.

“The economy continues to be the issue,” Stephens said.

AT&T’s overall profit rose to $ 3.7 billion, or 67 cents per share, from $ 3.58 billion, or 60 cents per share, in the year-ago quarter.

It reported a wireless service margin of 43.2 percent based on earnings before interest, taxes, depreciation and amortization, up from 42.3 percent in the year-ago quarter and beating the six analysts’ expectations for 42.3 percent.

On the plus side AT&T cut its capital spending target for 2014 and 2015 to $ 20 billion each year from its previous expectation for $ 22 billion as a network upgrade it is working on will cost less than it had previously expected.

The company kept its capital spending budget for 2013 in the $ 21 billion range.

It ended the quarter with 8.7 million U-verse high-speed Internet and television subscribers. It added 731,000 U-verse Internet subscribers, which was a record for the company, and 232,000 U-verse TV subscribers – its strongest growth rate in nine quarters.

AT&T shares fell about 2 percent to $ 38.24 in after-hours trade from their $ 39 close in the regular New York Stock Exchange session.

(Reporting by Sinead Carew; Editing by Jim Marshall, Tim Dobbyn and Phil Berlowitz)


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