H-P Steps Up Buyback Program
Stock quotes in this article:
HPQ
Just over a month after Hewlett-Packard(HPQ) blindsided Wall Street with a stunning two-quarter earnings shortfall, the Palo Alto-based giant is aiming to regain investor confidence by buying back billions worth of its own stock.
The company said Monday it expects to buy back $2.1 billion in stock during the fiscal fourth quarter, amounting to a hefty 4% of total shares outstanding. The repurchase will likely use up the remaining buyback authorization approved by H-P's board in May 2004. In a statement, Chief Executive Officer Carly Fiorina said the deal shows H-P's intent to "aggressively repurchase shares in the immediate future." "We believe that at current price levels, H-P shares represent an attractive investment," said Fiorina, saying the buyback reflects the company's "confidence in our long-term growth and profitability." Some institutional investors indeed view H-P as an intriguing value stock, with a few arguing that it was punished too harshly for its August earnings warning. Still, the miss alienated other investors by reviving worries about the company's inconsistent financial performance. Out of the $2.1 billion in buybacks expected for the quarter, H-P accumulated $1.3 billion worth of stock through an accelerated share repurchase undertaken with Merrill Lynch. H-P also said Monday its board has OK'd an additional $3 billion for share repurchases. By reducing share count, the buybacks are intended both to bolster earnings and return money to shareholders and (on a less investor-friendly note) to offset dilution from the issuance of stock options and the employee stock purchase plan. In recent trading the stock was up 49 cents, or 2.7%, to $18.60.- Loading Comments...
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