* Estimates 4th-qtr adjusted earnings/shr $1.26-$1.30
* Estimates sales to rise by about 19.8 pct
* Raises share repurchase program to $1.5 bln from $1 bln
* Ackman raises questions about Herbalife distributors
Feb 3 (Reuters) - Herbalife Ltd estimated fourth-quarter profit and sales above market forecasts on Monday, but investor William Ackman quickly struck back with claims about a former top Herbalife distributor, raising new questions about the company's sales practices.
Herbalife shares rose as much as 6 percent in early trading on Monday after the company also said it had increased its share repurchase program by $500 million to $1.5 billion, but the shares reversed gains to trade lower after Ackman released his claims on a new website.
Hours after the company's release on its expected results for the 2013 fourth quarter, Ackman charged on a new website that Herbalife, which he accuses of being a pyramid scheme, found new distributors through a business that had been convicted in Canada 10 years ago of running an illegal pyramid scheme.
Ackman spotlighted Shawn Dahl, who had been a top Herbalife distributors for years, saying that Dahl attracted distributors with false promises of making money quickly.
Herbalife did not immediately respond to a request for comment about Ackman's new website. Dahl did not immediately return messages left through his new business venture for comment.
Ackman has long said that he is sticking by his $1 billion bet against the company, arguing that Herbalife's share price will eventually fall to zero once regulators investigate his allegations that Herbalife is a pyramid scheme.
Herbalife, which sells weight-loss products, has vehemently denied that it is operating a pyramid scheme - an unsustainable business that typically makes most of its money by recruiting distributors rather than selling products to real customers.
The company's shares have fallen 20 percent this year but are still up 80 percent for the last 12 months. Herbalife shares on Monday were down 2.5 percent at $62.74 in afternoon trading.
Ackman's paper losses on Herbalife, which had at one point reached $500 million, have shrunk this year to be closer to $300 million, a person familiar with the performance of Ackman's hedge fund, Pershing Square Capital Management, said.
Big-name investors who have lined up against Ackman, including Carl Icahn and George Soros, have done better. Icahn is up about $500 million since he first reported a stake in Herbalife in February 2013, according to Reuters calculations.
Icahn controlled about 16.8 percent of Herbalife as of Sept. 30, making him the company's biggest shareholder.
Ackman is relying on regulators to help his crusade against Herbalife. He got a boost last month when U.S. Senator Edward Markey called on the Securities and Exchange Commission and the Federal Trade Commision to investigate the company.
Herbalife, which sells products through a network of independent distributors, said on Monday it earned between $1.26 and $1.30 per share, before items, in the fourth quarter ended Dec. 31.
Analysts on average had expected a profit of $1.17 per share, according to Thomson Reuters I/B/E/S.
"Ultimately it's strong recruiting momentum around the world ... (that) is really driving the core results," said Wedbush Securities analyst Rommel Dionisio, adding that the results showed the strength of Herbalife's business model.
The company said fourth-quarter sales rose about 19.8 percent, which works out to about $1.27 billion. Analysts on average had expected sales of $1.22 billion.
Herbalife forecast profit for the current first quarter of $1.24-$1.28 per share, saying that the weak Venezuelan bolivar has hurt earnings. Analysts were expecting a profit of $1.40 per share.
The company reaffirmed its 2014 adjusted earnings forecast.
It also said it planned to raise about $1 billion through an issue of convertible senior notes due 2019 to fund the share buyback. The initial purchasers of the notes will be Bank of America Merrill Lynch, Credit Suisse, HSBC and Morgan Stanley.