Eastman Kodak Buying Back $1 Billion in Stock

Eastman Kodak (EK Quote - Cramer on EK - Stock Picks) will buy back $1 billion of its outstanding common stock, the company announced Tuesday.

At recent share prices, the purchase would represent approximately 25% of the shares outstanding. Shares were recently trading at $13.86, up $1.52.

The Rochester, N.Y.-based company also announced that it has received a tax refund from the Internal Revenue Service of $581 million. The refund is related to the audit of certain claims filed for tax years 1993-98, and is composed of a refund of past federal income taxes paid of $306 million and $275 million of interest earned on the refund.

The company plans to fund the majority of the stock-repurchase program, which is authorized through the end of 2009, from the tax refund, with the remainder to come from available cash on hand.

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"Our board's decision to authorize this repurchase initiative underscores the rising confidence we have in Kodak's product portfolio, in our current financial position, and in the execution of our strategy," said Antonio M. Perez, chairman and chief executive officer.