IN THE NEWS

U.S. firms boost share buybacks despite higher prices

LOS ANGELES >> Stock buybacks by U.S. corporations hit their highest level since the 2008 global financial crisis, as companies gobbled up their own shares despite paying steadily rising prices.

Total share repurchases by companies in the Standard & Poor’s 500 index hit $128.2 billion in the third quarter, according to researcher S&P Dow Jones Indices. That’s the most since $141.7 billion in the final quarter of 2007. Buybacks rose 8.6 percent from the second quarter, and 23.6 percent in the last year.

Repurchases can be a mixed blessing for shareholders. Theoretically, they help prices by reducing the outstanding number of shares, which boosts earnings per share. However, repurchases at many companies are counterbalanced by the often-plentiful stock options issued to executives, thus dulling the potential improvement in EPS.
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Los Angeles Times