Cisco Announces $10 Billion Stock Buyback

Cisco Systems (CSCO) said in a press release that the co.’s board of directors has authorized up to $10 billion in additional repurchases of its common stock. Cisco had previously authorized up to $72 billion in stock buyback. The co. said there is no fixed termination date for the repurchase program.

“Today’s decision to increase Cisco’s stock repurchase program is part of our continued commitment to return cash to shareholders, which also includes our plan to issue a dividend this fiscal year,” said Frank Calderoni, CFO, Cisco. “We are confident in our strategy, product portfolio and ability to capture and lead new markets.”

Retiring shares through buybacks is effective because is a signal to the market that the shares are undervalued relative to inherent earnings ability. Also, fewer shares outstanding make y/y earnings growth easier to attain. However, this strategy fails to address the co.’s most pressing need, which is growing revenues. Cisco issued disappointing guidance on Nov. 10th.

At last check, CSCO shares were down 7 cents to $19.54, a loss of 0.36%.

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About Ron Haruni 1069 Articles
Ron Haruni is the Co-Founder & Editor in Chief of Wall Street Pit.

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