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IBM Buys Back $5 billion Worth Of Stock

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.

Our Comments

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.

Related Links

IBM to spend $5 billion more on stock buyback

(Associated Press)

IBM adds $5b to stock buyback plan


IBM Board Authorizes $5 Billion for Stock Buybacks (Update4)


IBM Board Approves Quarterly Cash Dividend; Authorizes $5.0 Billion for Stock Repurchase


IBM allocates $5B to buy back stock

(Triangle Business Journal)

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.