U.S. Markets open in 1 hr 16 mins

Medifast 3Q widely beats market expectations

OWINGS MILLS, Md. (AP) -- Medifast Inc.'s share jumped in after-hours trading after the weight-loss company reported that its third-quarter profit increased more than 40 percent.

The company said it saw great response to its advertising and new programs during the period, as well as a benefit from lower expenses.

Medifast earned $7.2 million, or 52 cents per share, for the quarter that ended Sept. 30. That's compared with $5.1 million, or 36 cents per share, earned in the third quarter last year. The most recent quarter includes a 10 cent-per-share bump up from a favorable tax rate.

Its total revenue increased 20 percent to $91 million, with the company's three main distribution channels posting double-digit sales growth.

The quarterly vastly exceeded market expectations. Analysts polled by FactSet were expecting the company to earn 38 cents per share on revenue of $90 million.

The company's gross profit improved to 75.1 percent from 74.2 percent last year partly as a result of reduced discounting, the company said.

Medifast expects to earn 23 to 25 cents per share for the fourth quarter on revenue in the range of $82 million to $84 million. Analysts were expecting the company to earn 19 cents per share on revenue of $80.2 million.

The company, based in Owings Mills, Md., sells products and programs for weight loss.

Shares jumped $1.58, or nearly 6 percent, to $28.40 in late trading. Its stock closed regular trading up 45 cents to $26.82.