In a major boost to its stock buyback drive, IBM Corp. has reportedly decided to cough up another $5 billion, dispensing economic rewards to shareholders after consecutive quarters showing significant profit gains.
The hike, following a remarkable 43 percent increase in the company’s profits, comes on top of an additional $4.2 billion originally poured by the Big Blue at the end of September for stock buyback program.
This package of $5 billion from IBM has taken its total stimulus for the stock buyback scheme to around a whopping $10 billion, indicating the company’s ability to dispel the financial woes surrounding the recent credit crunch. IBM noted that it has already spent a massive $73 billion on stock buybacks and dividends since 2003.
“IBM`s strategic transformation to higher value businesses continues to drive profitable growth, and our strong cash flow performance has enabled IBM to return $73 billion since 2003 to our shareholders”, Reuters cited Samuel J Palmisano, IBM chairman, as saying.
The company has forecasted that its annual earnings would clock into the tunes of around $9.85 per share, after registering a notable 14 percent hike in profits for the third quarter.
IBM posted impressive third quarter results with its profits were increased to $3.4 billion, up from $1.3 billion, from the same period a year back.
IBM is doing well, very well indeed. Being able to buy back stock (and therefore increasing the shares price significantly... in theory). IBM stock price has increased by a whopping 43 percent since the beginning of the year more than the Nasdaq and someone who purchased IBM stock at the beginning of the year would have been able to sell at any time of the year and still make a profit.
(Triangle Business Journal)