Posts for Ticker ‘buyback’

Verizon Expands 100 Million Share Buyback Plan (VZ)

Verizon Communications Inc. (NYSE: VZ) has announced that its Board of Directors has approved the buyback and repurchase up to 100 million shares of its common stock.  This replaces the previous 100 million share buyback plan, of which there were some 30 million shares.  The prior plan was due to expire on Feb. 28, 2010, and this new extended buyback plan is set to expire on Feb. 28, 2011.

Verizon noted that it has roughly 2.9 Billion shares outstanding.  At today’s share prices, this represents roughly $3.6 Billion for share buybacks.

Jon C. Ogg
February 7, 2008

Posted on: February 7, 2008 – 12:08 pm in Stock Buybacks, ,

International Flavors & Fragrances Kicks Buybacks Into Overdrive (IFF)

International Flavors & Fragrances Inc. (NYSE: IFF) has announced that it has entered into a $450 million accelerated share repurchase program with Morgan Stanley. Under the accelerated buyback plan, IFF expects to repurchase 10% (or 8 million shares) of its currently outstanding stock, which are expected to be delivered to IFF on September 28, 2007.

Additional shares may be delivered to the Company by the second quarter of 2008. IFF is acquiring these shares under a previously announced $750 million share repurchase program that was approved by IFF’s Board of Directors on July 24, 2007.

IFF is a leading creator of flavors and fragrances by its own pen, but it is perhaps the leader that is one of the behind the scenes in fragrances and flavors.  Its fragrances are used in soap, detergents, creams, perfumes, deodorants, candles, air fresheners and more; while its flavors are used in soft drinks, candies, baked goods, desserts, prepared foods, dietary foods, dairy products, drink powders, pharmaceuticals, snack foods, and alcoholic beverages.

The company’s market cap is just over $4 Billion, while it lists its total assets at $2.546 Billion and total liabilities as $1.552 Billion.  If you back out intangible and goodwill from its books, the net tangible assets are $256 million after you back out all liabilities.  Analysts are looking for 2007 EPS as $2.73 on $2.25 Billion revenues and 2008 as $3.07 EPS on $2.37 Billion in revenues.  Shares closed Friday at $48.67, within the $38.86 to $54.09 trading range over the last 52-weeks.

Jon C. Ogg
September 17, 2007

Posted on: September 17, 2007 – 6:40 am in Stock Buybacks, , ,

Why Does Cisco Need More Share Buybacks Now? (CSCO)

Usually a $5 Billion add-on to a share buyback plan is a good thing for shareholders, or at least they take it that way.  Last night Cisco Systems announced that its board of directors authorized an amount of up to an additional $5 Billion to be used for buying back stock.  The previous plan had reached up to $47 Billion in stock repurchases, and there is no fixed termination date for this plan.

The company believes that this is the best way to return cash to shareholders.  It also noted that in its entire buyback plan initiated since September 2001 (the worst month for the US since World War II) it has retired 2.2 Billion shares for some $41.7 Billion so far.  That represents an average price of $19.20 per share, leaving $5.3 Billion as the remaining authorized amount.

But the question is, does the company feel it needs to use this stock-stabilizing tool when shares are at 5-year highs?  It also makes one wonder if the company is having a hard time finding sizable acquisitions that it can add like its old Scientific-Atlanta deal.  Cisco may deserve to go higher yet, but it should on its own merits.  The company should either deploy this cash to make more strategic acquisitions of size.  Or if it really wants to return cash it could try the one-time special dividend as an actual return of capital while tax rates are so low on dividends. 
To top it off, $5 Billion in today’s value for Cisco isn’t what it was just last year.  With shares near $30.00 and with the stock averaging over 50 million shares per day, this would really generate about 3.3 days worth of trading volume.  If the networking and communications equipment giant wants to make these buybacks, hopefully it will only do so during periods where their stock is under pressure.  We aren’t criticizing the company itself over this too much because the management is solid, but buybacks are supposed to be done when shares are weaker than the company would expect instead of at multi-year highs. 

This doesn’t change any stance on John Chambers being one of the most entrenched CEO’s out there, but we’d still like to know if the company thinks this is the best use of current capital.   There aren’t too many VMware opportunities out there like it also announced, but there are certainly other add-on acquisition or competition-killing opportunities out there. 

Jon C. Ogg
July 27, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: July 27, 2007 – 9:25 am in Shareholder Issues, Stock Buybacks, Technology Companies, Telecom, , , ,