24/7 Wall St.

International Business Machines Corp. (NYSE: IBM) has just lived up to its promise of endless share buybacks with a greatly expanded share buyback plan. The goal is to keep buying up the stock to shrink the float, but even as critical as we have been of IBM the admission has to be made that is a massive stock buyback plan announcement. Unfortunately, this is likely the only way that IBM can get to its dead set goal of $20.00 in earnings per share by the year 2015.

IBM is authorizing a stock buyback plan of up to $15 billion. This plan could have been communicated better by our take because it is actually much larger than the headline amount of $15 billion might indicate.

What is better than what the headline might suggest is that this new $15 billion buyback plan is in addition to the $5.6 billion remaining under authorization at the end of September 2013. This really takes the existing buyback plan up to a total of approximately $20.6 billion when you combine the two buybacks, and the company confirmed that in its release. For a comparison, IBM’s market cap is about $197 billion as of now.

This is not the last common stock buyback plan either. IBM said that it “expects to request additional share repurchase authorization at the October 2014 board meeting.” Ginny Rometty is keeping with the Big Blue culture of this earnings goal at all costs. We still think this goal is a mistake, but again this is an impressive share buyback plan.

Another announcement is that IBM declared a regular quarterly cash dividend of $0.95 per common share. That comes to a mere 2.1% dividend yield. IBM needs to raise this dividend yield. The company has represented that its dividends and share repurchases have come to a total of over $159 billion since 2000.

IBM shares have traded higher in response to the buyback, with a gain of 2% to $180.90. Its shares have traded in a 52-week range of $172.57 to $215.90.