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Herbalife Profit Trails Estimates as Americas Sales Volumes Fall

July 28 (Bloomberg) -- Herbalife Ltd., the nutrition company facing a U.S. regulatory probe, posted second-quarter profit that trailed analysts’ estimates as sales volumes declined in the Americas.

Net income fell 17 percent to $119.5 million, or $1.31 a share, from $143.2 million, or $1.34, a year earlier, the Los Angeles-based company said today in a statement. Excluding some items, profit was $1.55 a share, missing the $1.57 average of four analysts’ estimates compiled by Bloomberg.

Chief Executive Officer Michael Johnson has been fighting back against a two-year assault by hedge fund manager Bill Ackman, who says the company is an illegal pyramid scheme. While the U.S. Federal Trade Commission is investigating the company’s practices, the multilevel marketer’s shares have gained under the attack and spiked 25 percent on July 22 after Ackman publicly detailed new allegations.

Revenue rose 7.1 percent to $1.31 billion in the quarter, missing analysts’ projections, as sales volume fell 1 percent in North America and 7 percent in South and Central America.

Adjusted profit per share in the current year will be $6.17 to $6.32, up from a previous forecast of $6.10 to $6.30, Herbalife said today. Analysts estimated $6.30, on average.

Herbalife shares dropped 7.1 percent to $62.68 at 4:37 p.m. in late trading in New York. The shares had dropped 14 percent this year through the close of regular trading today, compared with a 7.1 percent gain for the Standard & Poor’s 500 Index.

The company has repeatedly denied being a pyramid scheme.

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