Herbalife (NYSE:HLF) has been in the news quite a bit over the last few quarters, from the "Battle of the Billionaires" to the most recent actions by Senator Edward Markey who called for an investigation into its business model. With all of this going on, the company has continued to deliver on earnings and it has once again exceeded expectations in its newly released fourth-quarter report. Let's take a look at the results and decide what side we should take in this ongoing battle and how we should handle it from an investment standpoint.

The quarterly results
Herbalife released its fourth-quarter report on Feb. 18 and the results surpassed analyst expectations; here's a breakdown:

Metric Reported Expected
Earnings Per Share $1.28 $1.25
Revenue $1.27 billion $1.25 billion

Earnings per share increased 28% and revenue increased 19.8% year-over-year, driven by sales growing in all but one of Herbalife's regions:

Region 4Q 2013 4Q 2012 Growth
South & Central America $290.34 million $203.25 million 42.9%
Asia Pacific $279.60 million $295.17 million (5.3%)
North America $210.30 million $197.05 million 6.7%
Europe, Middle East, & Africa $197.64 million $164.68 million 20%
China $148.39 million $67.10 million 121.2%
Mexico $142.60 million $132.07 million 8%

Operating income showed strength as well, rising 13.8% to $181.86 million, but the operating margin declined by 76 basis points to 14.33% on higher expenses. Additionally, the company announced that it will maintain its quarterly dividend of $0.30 in the first quarter and the dividend will be payable on March 18. Overall, these results would have single-handedly helped push shares higher, but Herbalife provided an added boost when it announced its outlook on fiscal 2014...

The year ahead
In the report, Herbalife also handed over its outlook for the first quarter and the full year of fiscal 2014. Here is what the company expects to see and the analysts' estimates:

First Quarter:

Metric Outlook Expected
Earnings Per Share $1.25-$1.29 $1.35

Fiscal 2014:

Metric Outlook Expected
Earnings Per Share $5.85-$6.05 $5.87

Although the company's first quarter expectations came in just below analyst expectations, Herbalife immediately made up for this by projecting better-than-expected full-year earnings. In addition, the company said it expects revenue growth of 8%-10% on volume growth of 6.5%-8.5% in the first quarter and revenue growth of 7.5%-9.5% on volume growth of 6.5%-8.5% for the full year. This would equate to another record-setting year for Herbalife and it would support continued price appreciation in the stock throughout the year.

Struggling competitors

As Herbalife showed great success in its most recent quarter, two of its competitors in the health and wellness industry, GNC (NYSE:GNC) and Weight Watchers (NASDAQ:WW), had a very rough time. GNC reported fourth-quarter earnings that missed expectations on both the top and bottom lines, citing challenges within the retail environment as the cause for the weakness. However, the trouble was not contained within the fourth quarter, as the company proceeded to cut its outlook on fiscal 2014 after challenges continued in January and February. This caused its stock to take a 14% haircut during the trading day and may be a thorn in its side for the remainder of the year.

Weight Watchers' report was released on the same day as GNC's report and it was mixed in comparison with analysts' estimates, but it was much worse overall; this is because the company noted that fewer active members were using its services, and members were leaving at a quicker pace than new members were added. This was the worst possible scenario Weight Watchers could ever be faced with as a service company and it could eventually push the company out of business. Its stock fell by more than 25% following the release and it has now fallen by over 50% in the last year. Needless to say, investors should avoid Weight Watchers indefinitely. 

The Foolish bottom line
Herbalife has exceeded analysts' expectations in its latest release and set record earnings and revenue in the process. It has achieved this success while surrounded by negativity, which shows that a great company with a strong brand can overcome anything. I believe that Herbalife's quarterly results and outlook on fiscal 2014 could support a continued run higher, but I would not be a buyer right now. With Senator Edward Markey pushing for an investigation that will probably happen, Foolish investors should wait until a conclusion is reached before placing new investments. The start of an investigation alone could provide a much better entry point and maybe even a steep sell-off like what we saw in December of 2012 and February of 2013.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.