IBM Adds $15 Billion to Buyback Plan

SAN FRANCISCO -- A big boost to IBM's(IBM) stock-buyback program could raise its 2008 earnings by a nickel a share, the company said Tuesday.

On the same day the company brought out its latest mainframe, Big Blue said it will repurchase up to $12 billion of its stock in 2008. The action could lift EPS by 5 cents, to at least $8.25, from a prior range of $8.20 to $8.30.

Shares were up $3.21, or 2.9%, to $113.28 in recent trading.

Tuesday's new authorization of $15 billion overall brings the company's total repurchase program to $15.4 billion. Buybacks in 2008 will be made from cash from operations, the company said.

"IBM's profitable growth and consistently strong cash flow enable the company to continue to return value to our shareholders," Chairman and CEO Samuel J. Palmisano said in a statement.

On Tuesday, the company announced its latest mainframe, System z10, which is said to be up to 50% faster than its predecessor, the z9, released in 2005. IBM compared its computing power to 1,500 standard x86 servers, but said it is 85% more energy efficient.

The company's systems business, which has been down year over year in recent quarters, typically gets a boost from the launch of a new mainframe.

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