Weight-loss and nutritional products maker Herbalife Ltd (HLF.N) 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 $6.05.
Ackman took a $1 billion short position against Herbalife in December 2012.
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 (WTW.N), Nutrisystem Inc (NTRI.O) and Medifast Inc (MED.N), 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 a time.
Herbalife shares were up 0.4 percent to $58.85 in extended trading.
(Reporting by Siddharth Cavale in Bangalore and Lisa Baertlein in Los Angeles; Editing by Leslie Adler and Andre Grenon)