Nutritional products maker Herbalife Ltd. reported a nearly 27% jump in third-quarter profit amid double-digit sales growth in China and Latin America.
The Los Angeles company reported net income of $142 million, or $1.32 a share, for the three months ended Sept. 30. That compares with $111.9 million, or 98 cents, a year earlier.
Excluding expenses for non-recurring items, the company earned $1.41 a share, well above analysts' expectations of $1.14 a share.
Sales grew 19.3% to $1.2 billion. They surged 76.5% to $136.7 million in China and 44% to $241.2 million in South America and Central America.
Herbalife raised its 2013 profit estimates, saying it could earn $5.19 to $5.23 a share, up from its previous projection of $4.83 to $4.95.
The company released its results after the stock market closed Monday. In regular trading, Herbalife shares rose $1.55, or 2.3%, to $67.92.
The company also announced that it has named Richard H. Carmona, a former U.S. surgeon general, to its board.
Herbalife's stock has risen steadily for much of the last five months amid a pitched battle with activist hedge fund manager Bill Ackman.
The money manager accused the company last December of operating a pyramid scheme and said he took a $1-billion short position on the stock, meaning he would profit from a price drop.
Herbalife has insisted that Ackman was wrong, saying its multilevel marketing business model is legal and similar to those at many other companies. Herbalife has been in business since 1980.
Thus far, Ackman's bet against Herbalife has been a loser, and prominent investors such as Carl Icahn and George Soros have bought large stakes in the company.
Ackman said this month that he closed nearly half his short position on the stock.
In a letter to his investors, Ackman said his fund cut its short position more than 40%, or more than $400 million. The fund replaced it with "put options" that would enable the fund to profit if Herbalife's stock price falls "within a reasonable time," without the risk of a short squeeze, Ackman wrote.
Herbalife has acknowledged in regulatory filings that it is cooperating with an investigation by the Securities and Exchange Commission. Several consumer and civil rights groups also have urged the Federal Trade Commission to investigate.
The primary issue is the way Herbalife pays its independent salespeople. These distributors buy the company's diet and health foods at a discount and receive commissions based on their sales and the sales made by others who they recruit into the business.
Fewer than 1% of its distributors make more than $25,000 a year, a fact that led Ackman and others to conclude that only a fortunate few at the top of the pyramid make money, while scores of others fail.