IBM’s Huge Buyback Juices 2008 EPS Targets (IBM)

February 26, 2008 by Douglas A. McIntyre

IBM, or International Business Machines Corp. (NYSE: IBM), is on a roll.  The company just raised its guidance and boosted its share buyback plan by a massive amount. 

For starters the company said it had $400 million remaining on an existing share buyback plan, and it is now lifting this to be $15 BILLION more to a total of $15.4 Billion.  More importantly, it plans to spend up to $12 Billion for these buybacks in 2008.  That is more than 100 million shares.

Because of the share count reduction, IBM anticipates this adding $0.05 to its prior EPS target for 2008 of $8.20 to $8.30.  It now sees at least $8.25 EPS.

This extra $0.05 is on a reduced share count, so net net is not as large as one might think.  But the additional support of an extra 100+ million shares coming off the market won’t hurt.  This represents more than 8-days worth of full average trading volume.

IBM shares are up almost 3% at $113.00, and the 52-week trading range is $88.77 to $121.46.

Jon C. Ogg
February 26, 2008

Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE

Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply
clicking here
you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.


Click here
to match with up to 3 financial pros who would be excited to help you make financial decisions.