Herbalife shares plunge on disappointing outlook

NEW YORK - Shares of nutritional and weight-loss supplements maker Herbalife Ltd. plunged Tuesday after the company disappointed Wall Street with a weaker-than-expected outlook.

Shares fell $5.99, or 23.5 percent, to $19.46 in Tuesday trading. The stock reached a near four-year low of $17.23 earlier in the trading session.

On Monday, the Los Angeles-based company reported third-quarter profit topping Wall Street forecasts on sales growth in the U.S., Brazil, China and Italy. But, it said the dollar's recent sharp appreciation against major world currencies will hurt fourth-quarter results.

Herbalife expects fourth-quarter profit between 65 and 75 cents per share, while Wall Street expected 87 cents per share. For the full year, the company expects profit of $3.50 to $3.55 per share, while analysts expected $3.68 per share.

In 2009, Herbalife expects profit of $3 to $3.20 per share.

Despite the massive sell-off, analysts mostly reaffirmed positive outlooks for the company, citing its growth potential.

"To be sure, a significant currency swing is the primary culprit, but decelerating volume growth in several key markets is also a factor," Goldman Sachs analyst Simeon Gutman said in a note to investors.

He reaffirmed a "Buy" rating, though, saying the relatively defensive business has growth prospects over the long term.

Jefferies & Co. analyst Douglas Lane, meanwhile, also reaffirmed a "Buy" rating and $39 price target but acknowledged that sales outside of China might be slowing down.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.