The shares of International Business Machines Corp. (NYSE:IBM) witnessed 1% increase after the company announced additional $5 billion contribution to its share repurchase program. The company announced dividend of $1.10 per common share and by paying its December dividend, the company would complete regular quarterly dividend payments since 1916.
According to the news release on IBM’s official website, “The board today also authorized $5 billion in additional funds for use in the company’s stock repurchase program.” The company will purchase shares either in the open market or through private transactions. This amount is authorized in access to the remaining $1.4 billion for share repurchase and it would sum up to $6.4 billion in total.
The chairman and CEO of International Business Machines Corp. (NYSE:IBM), Ginni Rometty, said,
“We will continue to make the investments and changes necessary to manage our business for the long term and to shift to higher-value offerings. At the same time we remain fully committed to returning significant value to shareholders.”
According to the experts, the company is indulging into share buybacks at the expense of investing into the latest technologies. The tech giant has spent up to $13.5 billion in its share repurchase program during the first nine month of the current fiscal year.
Earlier, International Business Machines Corp. (NYSE:IBM) announced its third quarter 2014 financial results with net revenues of $22.4 billion and net income of $18 million during the quarter. Both the investors as well as the management were unsatisfied with the poor quarterly results. The company reported net income of $3.5 billion from its continuing operations with a 17% decline from the same quarter last year.
On the contrary, the CEO highlighted commendable growth in its strategic units including cloud, security services, and social networking. Mr. Rometty added,
“While we did not produce the results we expected to achieve, we again performed well in our strategic growth areas – cloud, data and analytics, security, social and mobile – where we continue to shift our business.”
This article has been written by Prakash Pandey.