Shares of engineering firm KBR jump on plan to repurchase up to 10 million of its shares
By APWednesday, June 9, 2010
KBR shares jump on 10M share buyback plan
NEW YORK — Shares of KBR Inc. jumped Wednesday after the engineering and construction company said it would buy up to 10 million of its own shares, which will help boost per-share earnings.
THE SPARK: The Houston company said on Tuesday that it would repurchase the stock to keep its outstanding share count at about 150 million.
THE BACKGROUND: In late April, KBR said its net income fell 40 percent during the first quarter, while revenue slid 18 percent.
Stock repurchases are making a comeback this year after buyback plans collapsed during the recession. As revenue shrank, companies were more intent on conserving cash.
According to data tracker Dealogic, 310 companies have announced plans to buy back up to $173.3 billion worth of stock as of Friday. That compares with 253 companies that had planned $20.3 billion in stock buybacks at the same time last year.
On Friday, Wal-Mart Stores Inc. said it planned a new $15 billion stock buyback program, one of the biggest stock repurchase plans announced this year. On Wednesday, three other companies announced repurchase programs. Entertainment company Viacom Inc., which owns MTV Networks, announced a stock buyback of up to $4 billion, while Brown-Forman Corp., the maker of Jack Daniel’s Tennessee Whiskey and Southern Comfort, and agribusiness company Bunge Ltd. announced smaller programs.
SHARE ACTION: KBR shares rose $2, or 10 percent, to close at $21.90.
