"The initiation of a stock repurchase program enhances our capital allocation strategy and provides us with a complementary tool to deliver value to our shareholders," said Tom Krause, Broadcom's Chief Financial Officer. "We are maintaining our policy of delivering 50% of trailing 12-month free cash flow to shareholders in the form of dividends while adding the ability to use the balance of our free cash flow not only for acquisitions but also for opportunistic buybacks."
Shares have declined nearly 6% over the past four weeks as a result.
"Shareholders have been very patient through the Qualcomm saga so it's nice to see the Broadcom management team reward shareholders with a large share buyback," Action Alerts PLUS senior portfolio analyst Jeff Marks told TheStreet.
Broadcom shares were up 4.5% after hours after falling 0.37% during the day.