Strong numbers drowned out by federal probe

A strong quarter from Under Armour was overshadowed by federal investigations into the company’s accounting practices. The company also lowered its revenue expectations for the year Monday.

The situation

The probe, first reported by The Wall Street Journal, is seeking information that would reveal whether the sports gear maker shifted sales from one quarter to another to make its financial standing appear healthier.

Under Armour Inc. told The Associated Press that it has been cooperating with the U.S. Securities and Exchange Commission and the U.S. Department of Justice on their investigations for two years. It said it believes its accounting practices and disclosures were appropriate.

Better than expected profit

Under Armour reported better than expected profit and revenue for the third quarter Monday, but shares fell more than 15%.

Quarterly profit reached $102.3 million, or 23 cents per share. That topped Wall Street per-share projections of 18 cents, according to Zacks Investment Research.

Revenue, at $1.43 billion, just edged out expectations.

In July, the company cut its revenue expectations for the year, and did so again on Monday.

The company expects a 2% increase in revenue, down from earlier projections that revenue would rise between 3% and 4%.

Under Armour had been an unparalleled success story and has gone head-to-head with Nike, which had dominated the sports gear market for years.

15% Drop in Under Armour shares $102.3 M Under Armour thirdquarter profit 2% Revised expected revenue increase for year 3-to-4% Previous expected revenue increase for the year

JOE RAEDLE / GETTY IMAGES Under Armour, a competitive challenger to Nike in the sports gear market, revised its revenue expectations amid a federal investigation of its accounting practices.