InterDigital Communications Corp. increased its share repurchase program from $200 million to $350 million.
The wireless technology provider said its board voted for the move due to “strong positive cash flow” in 2006 and the anticipation of “high levels of free cash” next year. The company has more than $300 million in net cash and has already bought back 6.4 million shares for $187 million under the current repurchase program.
“In first quarter (of) 2007, in addition to expected payments related to current royalties, we anticipate receipt of either scheduled license fee payments or new pre-payments totaling approximately $120 million from existing patent licensees,” CEO William Merritt said. “Our high level of share repurchases in recent years together with this expansion of our current program reflects both our confidence in our ability and our commitment to enhance shareholder value. In addition, we plan to initiate steps in 2007 to help reduce our weighted average cost of capital and further enhance shareholder value by introducing prudent levels of debt to our capital structure.”
Shares of InterDigital climbed 48 cents to $34.42 Thursday following the announcement before settling at $34.18 by mid-day Friday.
