SCHAUMBURG, Ill.-Motorola Inc. announced it will buy back up to $4 billion shares during the next year and a half, news that sent the company’s stock up slightly to $17.29 per share. Based on Motorola’s current stock price, $4 billion represents 10 percent of the company’s total market capitalization.
“We are pleased to initiate the first stock repurchase program in Motorola’s history,” said Ed Zander, the company’s chief executive officer. “Motorola’s financial performance over the past five quarters has proven that we have transformed our business model into one with the capability to consistently generate free cash flow. We believe this stock repurchase program creates value for stockholders and further underscores our confidence in Motorola’s long-term growth.”
“We believe the announcement is a positive signal on the progress of 2Q ’05 and management’s confidence in once again meeting or exceeding guidance,” wrote Ittai Kidron with CIBC World Markets Corp. in a research note to investors.
