Best Buy Sets $5 Billion Share Buyback
Best Buy Co., the world’s largest consumer electronics retailer, approved a new $5 billion share repurchase plan and raised its quarterly dividend by 7 percent after last quarter’s earnings exceeded analysts’ forecasts.
The buyback plan replaces the $5.5 billion program announced in 2007, which had $800 million left as of May 28, the Richfield, Minnesota-based company said today in a statement. The payout will be increased to 16 cents a share.
Increasing demand for mobile phones and tablets countered declining revenue from televisions in the quarter ended May 28. As competition intensified from Amazon.com Inc. and Wal-Mart Stores Inc., Chief Executive Officer Brian Dunn began reorganizing stores and retraining employees last year to push sales of gadgets that work together.
The stock jumped $1.19, or 3.8 percent, to $32.73 at 9:30 a.m. in New York Stock Exchange composite trading. Best Buy had fallen 17 percent in the past 12 months through yesterday.
Profit has declined in the past three quarters as Best Buy coped with competition from online sellers and discounters, and consumers’ outlook on the economy darkened.
Bloomberg’s gauge of economic expectations fell this month to the lowest level since March 2009 after unemployment hit a 2011 high of 9.1 percent in May.
Best Buy announced the measures as it prepares to host its annual meeting at its headquarters today. The retailer last raised its quarterly dividend, from 14 cents to 15 cents, in 2010.
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