Herbalife shares tank 12% on disappointing outlook

Herbalife reports miss trifecta
Herbalife reports miss trifecta

Herbalife reported earnings that missed expectations and offered a sales outlook that was well below Wall Street forecasts, sending shares plunging 13 percent.

The company reported operating earnings of $1.45 per share, against analysts' estimates of $1.51 per share. Revenue of $1.26 billion missed estimates of $1.32 billion, according to Thomson Reuters data.

It also disappointed with its fourth-quarter earnings guidance, which it now pegs at $1.30 to $1.40 per share, shy of analysts' expected $1.69 per share.

For 2015 the company forecast sales would be in a range from up 2 percent to down 1 percent. Analysts had expected sales to rise 7 percent. The low end of its earnings guidance for 2015 was also more than $1 below Wall Street expectations.

(Herbalife's CFO will appear on "Fast Money Halftime Report" Tuesday 11/4 at 12 p.m. ET to discuss the company's results).

Products are prepared for shipment at the Herbalife Los Angeles distribution center in Carson, California.
Patrick T. Fallon | Bloomberg | Getty Images

Last week Herbalife said it reached an agreement to settle a lawsuit brought by a former salesman. The suit, which was filed in California, claimed the company's multilevel marketing practices violate the law. The settlement does not admit any wrongdoing or liability—Herbalife said it wanted to avoid the cost and distraction of a prolonged legal battle.

The weight loss and nutrition products company has long been under attack from hedge fund manager Bill Ackman who is famously short the stock. In July he gave a presentation during which he called the firm "a travesty and also a tragedy," but instead of shaking confidence, the presentation boosted the stock by more than 25 percent. Those gains were largely erased, however, when Herbalife cut its 2014 sales outlook later that month.