Herbalife Ltd. shareholders probably won’t be vacationing in Venezuela anytime soon as devaluations in the country’s currency took a huge bite out of the company’s third-quarter earnings, sending stock prices tumbling.

The nutritional supplement company reported net income of $11.2 million (13 cents a share) for the quarter ended Sept. 30. That’s a 92 percent decrease from the same period last year, when it posted net income of $142 million.

The massive drop-off in net income was largely due to a more than $139 million pretax hit comprising foreign-exchange losses and other asset write-downs associated with wild fluctuations in the value of Venezuela’s currency, the bolívar.

Shares of Herbalife plunged after the Nov. 3 announcement, losing 11 percent in after-hours trading that day alone. The company ended the week down 20 percent to close at $39.78, making it the biggest loser on the LABJ Stock Index. (See page 30.)

The bolívar cut into Herbalife’s sales figures as well. Revenue for the most recent quarter was up 3.5 percent to $1.25 billion, but those numbers fell short of the nearly 9 percent growth predicted by Wall Street. Were in not for the problems in Venezuela, an important market for Herbalife, sales would have grown by 7 percent.

“Venezuela and currency in general had a significant impact in the quarter,” said Herbalife Chief Executive Michael Johnson during an earnings call last week.

However, the huge hit didn’t come out of the blue.

The Venezuelan currency had been overvalued for years under its former president, Hugo Chávez, who died in March of last year. The favorable exchange rate, coupled with high inflation in Venezuela, meant companies such as Herbalife were working with skewed numbers when valuing their assets and evaluating sales.

The new government, led by President Nicolás Maduro, has been trying to correct the problem by gradually devaluing the country’s currency over the last eight months and restricting the amount of cash that foreign companies can bring home.

Given the currency issues, John Staszak, an Herbalife analyst with Argus Research Co. in New York, said the company’s losses were to be expected.

Timothy Ramsey, an analyst with Pivotal Research Group in New York, gave Herbalife a “buy” rating in his Nov. 3 report, while also sounding optimistic that the company would survive a Federal Trade Commission investigation into pyramid scheme allegations.

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