nternational Business Machines Corp. (IBM) added $15 billion to its buyback plan as it reduces stock in circulation to increase earnings per share with sales continuing to decline.
The board authorized the funding today along with its quarterly dividend, according to a statement from the world’s largest computer-services provider. With the addition, the company now has $20.6 billion in its repurchase program, and it will request more next October, it said. IBM’s market value is about $199 billion.
Chief Executive Officer Ginni Rometty is rewarding shareholders who held on as the stock fell 7.4 percent this year through yesterday, compared with the 24 percent gain in the Standard & Poor’s 500 Index. With sales dropping, the company is counting on the buyback to help reach its goal of $20 in adjusted earnings a share by 2015, up from $15.25 last year.
“This is one of the biggest tools they have to increase earnings per share if their growth rate is flat,” said Ivan Feinseth, chief investment officer at Tigress Financial Partners, who doesn’t own IBM shares. “If they’re not growing, they can reduce their share count.”
