Dell announces additional $5 billion stock buyback
Dell (NASDAQ:DELL) announced late Tuesday its board has authorized an additional $5.0 billion for its stock buyback program, in addition to the $2.16 billion it has remaining from its previous share repurchase program.
The news comes about a month after the PC maker posted mixed second quarter results, ending the period with a record $16.2 billion in cash and investments.
While revenues rose a meagre 1% to $15.7 billion, profits spiked 60% to $1.01 billion, or $0.54 per share. The company also released a full year outlook, expecting operating income to grow by as much as 23%, but opted to lower its full year revenues outlook to between 1% and 5% growth, from its previously guided range of between 5% and 9%.
During that second quarter, Dell said it repurchased $1.1 billion in shares.
"Our efforts to streamline our operations and reduce costs have resulted in outstanding cash flow from operations, enabling us over the past five years to more than double the percentage of capital we've allocated to research and development, capital expenditures and acquisitions while continuing an ongoing stock repurchase program," said CFO Brian Gladden.
Indeed, since 2009, Dell purchased Perot Systems for $3.9 billion in cash, 3PAR for $1.8 billion, Compellent Technologies for $960 million, and most recently, Force10.
"With this additional commitment from the Board, we have the flexibility to continue making opportunistic share repurchases as a key element of our disciplined capital allocation strategy," Gladden concluded.
Dell's stock on the Nasdaq Exchange rose 2.02% as of 10:06 am EDT to $14.67.
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