S&P 500 companies set stock buyback record

Aug. 24, 2006 at 3:31 PM

NEW YORK, Aug. 24 (UPI) -- Stock buybacks by U.S. companies in the Standard & Poor's 500 surged 43 percent in the last quarter from the same period in 2005, setting a record.

S&P said Thursday that stock buybacks in the S&P 500 reached $116 billion during the second quarter, up 175 percent from the same period in 2004 and eclipsing the $104 billion level set in the fourth quarter of 2005.

"The record $116 billion in buybacks is the result of over 40 percent of the S&P 500 companies reducing their share count during the second quarter," said Howard Silverblatt, a senior index analyst at Standard & Poor's.

"The unprecedented expenditure on buybacks and the resulting share count reduction is having a material affect on both earnings-per-share and cash flow. Left unabated, this will eventually impact the supply of open market shares, and therefore the share price itself."

S&P also said that companies are spending as much on stock buybacks as they are on capital expenditures.

Follow us on Facebook, Twitter, and Instagram for more news from UPI.com
Related UPI Stories
share with facebook
share with twitter
Trending Stories