Qualcomm Plans $5 Billion Share Buyback to Placate Investors

Qualcomm Inc. (QCOM), the most cash-rich semiconductor company, said its board authorized a new $5 billion share repurchase program to return more money to investors.

The plan replaces an earlier $5 billion buyback program that was announced on March 5, the San Diego, California-based company said yesterday. Qualcomm had about $800 million of that earlier authorization remaining.

Qualcomm, which had more than $30 billion of cash and marketable securities at the end of its most recent quarter, is aiming to placate investors as semiconductor companies increasingly use their capital to repurchase stock and pay dividends. The company will also continue to invest in research and development, Chief Executive Officer Paul Jacobs said in the statement.

Qualcomm’s dividend offers an indicated yield of 2.1 percent compared with 3.9 percent at Intel Corp. (INTC)

Unlike Intel, Qualcomm is also delivering revenue growth. Qualcomm’s sales have increased on average 31 percent annually per quarter since 2010, and last period’s expansion of 35 percent put Qualcomm among the three fastest-growing large technology companies in the Standard & Poor’s 500 Index.

Qualcomm shares fell 2.9 percent to $68.09 at yesterday’s close in New York. The stock is up 10 percent this year compared with a 27 percent gain for the Philadelphia Semiconductor Index.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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