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GuruFocus has detected 3 Warning Signs with Herbalife Ltd $HLF.
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Herbalife Ltd (NYSE:HLF)
Retained Earnings
$-66 Mil (As of Dec. 2016)

Retained earnings is the accumulated portion of net income that is not distributed to shareholders. Herbalife Ltd's retained earnings for the quarter that ended in Dec. 2016 was $-66 Mil.

Herbalife Ltd's quarterly retained earnings increased from Jun. 2016 ($-253 Mil) to Sep. 2016 ($-166 Mil) and increased from Sep. 2016 ($-166 Mil) to Dec. 2016 ($-66 Mil).

Herbalife Ltd's annual retained earnings increased from Dec. 2014 ($-665 Mil) to Dec. 2015 ($-326 Mil) and increased from Dec. 2015 ($-326 Mil) to Dec. 2016 ($-66 Mil).


Retained Earnings is the accumulated portion of net income that is not distributed to shareholders. Because the net income was not distributed to shareholders, shareholders’ equity is increased by the same amount.

Of course, if a company loses, it is called retained losses, or accumulated losses.


Historically profitable companies sometimes have negative retained earnings. This is because they have cumulatively paid out more to shareholders than they reported in profits.

For example, in 2011, Microsoft had negative retained earnings. This does not mean the company lost more money than it made over the years. It just means it paid out more money than it earned.

If a company has negative retained earnings, investors should check the 10-year financial results. They should not assume that negative retained earnings prove a company has generally lost money in the past.

Of course, many companies with negative retained earnings have indeed lost money in the past.

Retained Earnings: Warren Buffett’s Secret.

One of the most important indicators of durable competitive advantage. Net earnings can be paid out as dividends, used to buy back shares or retained for growth.

If the company loses more than it has accumulated, retained earnings is negative.

If a company isn’t adding to its retained earnings, it isn’t growing its net worth.

Rate of growth of retained earnings is good indicator whether it’s benefiting from a competitive advantage.

Microsoft is negative because it chose to buyback stock and pay dividends.

The more earnings retained, the faster it grows and increases growth rate for future earnings.

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Herbalife Ltd Annual Data

Retained Earnings 2573160266294123247-665-326-66

Herbalife Ltd Quarterly Data

Retained Earnings -769-665-587-504-411-326-231-253-166-66
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