The second-largest US telecoms group, Verizon Communications is to buy back as many as 100 million of its shares, returning cash to investors.
The buy-back, equal to about 3.6% of Verizon’s outstanding shares, could cost as much as $3.62 billion at Wednesday’s closing price. Verizon’s stock rose 29 cents to $36.45 in late trade on Thursday. The shares had gained 30 per cent in the 12 months before that.
The share buy-back underscores the confidence of the Verizon board in the company’s financial outlook and the performance of Verizon Wireless, its mobile joint venture with Britain’s Vodafone group.
Verizon Wireless began taking pre-orders from existing customers on Thursday for Apple’s iPhone, which goes on sale on February 10 ending a three-year exclusive network agreement between AT&T and Apple in the US.
AT&T, Verizon’s main rival, announced plans to buy back as many as 300 million shares in December with no expiration date. US companies have been increasing their share buy-back programmes during the past year. Data from Birinyi Associates, the stock market research firm, indicate US companies announced share buy-back authorizations totaling $373.4bn in 2010.