(Recasts to move background up; adds tweet from Icahn)
April 28 Weight-loss and nutritional products
maker Herbalife Ltd on Monday reported a 9 percent
increase in global sales volumes for the first quarter and said
it was suspending its quarterly dividend to use the cash to
repurchase additional shares.
The dividend suspension from Herbalife, which has been
accused of being a "pyramid scheme" by hedge fund manager
William Ackman, prompted praise from legendary investor Carl
Icahn on Twitter.
"Great move by (Herbalife) to suspend dividend & buyback
shares ... Confirms confidence in the future," said Icahn, who
has a stake in the Los Angeles-based company.
Herbalife on Monday reported first-quarter adjusted net
earnings of $1.50 per share, topping analysts' average forecast
by 20 cents per share, according to Thomson Reuters I/B/E/S.
It also boosted its 2014 earnings forecast to a range of
$6.10 to $6.30 per share from its previous range of $5.85 to
Ackman took a $1 billion short position against Herbalife in
Since then, several civil rights groups also have alleged
the company is running a pyramid scheme, leading the Federal
Trade Commission, the Federal Bureau of Investigation, New York
State Attorney General Eric Schneiderman and Illinois Attorney
General Lisa Madigan to also open investigations.
The company denies the allegations. High-profile investors
such as Icahn, George Soros and Daniel Loeb have supported
Herbalife in the past by taking stakes.
Herbalife, which competes with Weight Watchers International
Inc, Nutrisystem Inc and Medifast Inc,
has been benefiting from what it calls the "daily consumption
model" and a focus on emerging markets.
Its daily consumption model, which promotes everyday use of
its products such as energy drinks and multi-vitamin tablets,
has seen higher demand because customers shell out less money at
Herbalife shares were up 0.4 percent to $58.85 in extended
(Reporting by Siddharth Cavale in Bangalore and Lisa Baertlein
in Los Angeles; Editing by Leslie Adler and Andre Grenon)