International Business Machines Corp. increased its stock repurchase fund by 75 percent to $11.7 billion and said it plans to ask the board to authorize more in April as it seeks to improve shareholder returns.
The company may buy shares in the open market or in private transactions, according to a statement today. Armonk, New York-based IBM spent more than $3 billion on share repurchases in each of the first two quarters of this year, according to data compiled by Bloomberg.
Chief Executive Officer Ginni Rometty is using record income this year from the company’s shift to more profitable software and services to reward shareholders whose stock has been outpaced by the broader market. While the Standard & Poor’s 500 index has increased at more than double the rate of IBM shares this year, the company’s total return including dividends and buybacks is 14 percent, compared with 16 percent for the S&P 500.
IBM rose 0.9 percent to $193.27 on Oct. 26, the most recent trading day. The stock market has been closed since yesterday because of superstorm Sandy. The shares have climbed 5.1 percent this year, compared with a 12 percent gain for the S&P 500.
IBM is projected to record net income of $17 billion this year, up 7 percent from 2011, according to the average of analysts’ estimates compiled by Bloomberg.
The board also declared a quarterly dividend of 85 cents a share to be paid Dec. 10, the company said. IBM last increased its dividend in April.