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IBM's earnings outlook ticks higher, reiterates strong buyback plans for 2008

IBM's earnings outlook ticks higher, reiterates strong buyback plans for 2008

IBM Corp. raised the low end of its 2008 earnings outlook Tuesday and said its board of directors had authorized a continuation of its massive stock buyback program.
IBM now expects earnings per share to exceed $8.25 (euro5.55) this year. Previously the company had given a range of $8.20 (euro5.51) to $8.30 (euro5.58), and analysts surveyed by Thomson Financial were expecting $8.22 (euro5.53).
IBM has spent $94 billion (euro63.2 billion) buying back shares since 1995, including $18.8 billion (euro12.64 billion) last year. Tuesday's decision by the board will let the technology company spend another $15 billion (euro10.08 billion) on share repurchases, in addition to $400 million (euro268.93 million) left over from a previous authorization.
IBM said it expects to spend $12 billion (euro8.07 billion) of that pool buying back shares in 2008.
IBM shares were up $4.86 to $114.94 in afternoon trading.
IBM's aggressive stock repurchases are expected to continue in the coming years. IBM executives have described a plan for earnings per share in 2010 to be as high as $11 (euro7.40), which would represent a gain of nearly $5 (euro3.36) from 2006. Roughly $1.10 (euro.74) of that $5 (euro3.36) increase is expected to come from taking shares off the market.
For now, the few analysts with 2010 forecasts need some convincing of IBM's plan: Thomson Financial says the consensus forecast for that year is $10.35 (euro6.96) per share.


Updated : 2021-04-23 05:38 GMT+08:00