Weight-loss stocks post large-scale gains

chart_ws_stock_weightwatchersinternationalinc.top.png By Ben Rooney, staff reporter


NEW YORK (CNNMoney) -- If going on a diet was your New Year's resolution this year, Wall Street is betting that you'll succeed.

Shares of Weight Watchers (WTW), the company behind the point-based diet system, surged 35% Thursday after the company issued a far better-than-expected 2011 profit outlook.

The New York-based company said it expects to earn between $3.50 and $3.85 per share this year. Wall Street analysts surveyed by Thomson Reuters were expecting full-year earnings between $2.64 and $2.90 per share.

Weight Watchers said net income in the fourth-quarter surged 160% to $48.9 million, or 66 cents per share, from $18.7 million, or 24 cents per share, a year earlier. Full-year earnings for 2010 were also above expectations.

The blockbuster report helped boost shares of other diet companies such as NutriSystem (NTRI), which gained nearly 4% in early trading. Shares of eDiets.com (DIET), a minor player in the weight-loss business, were up 25% to about 5 cents each.

David Kirchhoff, chief executive of Weight Watchers, said the results were driven by strong demand for the company's subscription-based weight-loss products, which involve weekly meetings and Web-based dietary services.

"We are seeing terrific enrollment volumes in our North American and U.K. meeting businesses and further strengthening in our WeightWatchers.com business," he said.

Weight Watchers overhauled its points system late last year, upgrading the decades-old calorie guidelines and launching an aggressive advertising campaign.

The new "PointsPlus" system was the main force behind Weight Watcher's strong performance in the fourth quarter, said Kurt Frederick, an analyst at Wedbush Securities.

"We expected a good quarter, but not this good," he said.

The trend will probably continue in the first quarter, which is the unofficial start of "diet season," said Frederick. But earnings for diet companies such as Weight Watchers tend to taper off near the end of the year, he added, when dieters' conviction bumps up against the holiday eating season.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,079.57 0.00 0.00%
Nasdaq 4,557.70 -11.92 -0.26%
S&P 500 1,996.74 0.00 0.00%
Treasuries 2.33 -0.03 -1.14%
Data as of 11:42pm ET
Company Price Change % Change
Apple Inc 102.25 0.12 0.12%
Bank of America Corp... 16.01 -0.19 -1.17%
Facebook Inc 73.86 -0.78 -1.04%
Pfizer Inc 29.38 -0.11 -0.37%
Intel Corp 34.65 -0.14 -0.40%
Data as of 4:02pm ET

Sections

The CEO of American International Group, Robert Benmosche, says he is leaving the company earlier than expected because of a terminal cancer diagnosis. More

Prime Minister Shinzo Abe has been trying to reshape Japan's economy. Can he end deflation and deliver a revival? More

Whether you've got wanderlust or an airline grievance, here are some apps to pack onto your phone. More

Whether you've got wanderlust or an airline grievance, here are some apps to pack onto your phone. More

Five CNNMoney readers share stories about saving that you can learn from: What they would do differently if they had another chance. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.