Herbalife rallied Monday after the company posted quarterly results that topped Wall Street expectations. The company also said it is terminating its dividend.
The company posted earnings of $1.50 a share on sales of $1.3 billion, exceeding estimates for $1.30 a share on $1.24 billion in revenue, according to a consensus estimate from Thomson Reuters.
Shares rallied in extended-hours trading. (Click here to get the latest quote.)
The company also terminated its dividend and said it will use the cash instead to buy back additional shares.
(Read Carl Icahn's tweet here)
In addition, Herbalife said it expects to post current-quarter earnings of between $1.51 a share and $1.55 a share, versus expectations for $1.56 a share. But the company handed in full-year guidance that exceeded expectations.
"We continue to achieve record earnings, strong sales growth and enhanced profitability," said chairman and CEO Michael Johnson, in a press release. "In addition, we are pleased to raise our expectations for the balance of 2014. This reflects our confidence that Herbalife is well-positioned to continue to grow and play an increasingly important role in improving nutrition and reducing obesity around the world."
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The diet and nutrition firm has been under scrutiny from federal and state officials, who are reportedly investigating claims that the firm misled prospective distributors about its business model and earnings potential.
Earlier this month, billionaire hedge fund manager Bill Ackman revealed that he agreed to pay an ex-Herbalife executive as much as $3.6 million over the next 10 years if he lost his job after revealing inside information to U.S. investigators, according to an ABC News report.
Ackman has a $1 billion bet against the company's stock and has accused it of operating an illegal pyramid screen.