Newspaper article THE JOURNAL RECORD

GE Starts Huge Stock Buyback

Newspaper article THE JOURNAL RECORD

GE Starts Huge Stock Buyback

Article excerpt

NEW YORK (AP) _ Saying business prospects were strong, General Electric Co. on Friday authorized a $5 billion stock buyback over the next two years and boosted its dividend 14 percent.

The nation's fifth largest industrial company ended its last significant buyback program two years ago after spending $5 billion over three years. It has increased the shareholder dividend every year since 1975. The new quarterly dividend is 41 cents per share, up 5 cents.

The two leading credit ratings agencies, Standard Poor's Corp. and Moody's Investors Services, each reaffirmed their top-grade ratings on GE's debt after the announcement.

Share repurchases became increasingly frequent this year, reflecting an effort by many companies to stimulate the value of their stock.

Securities Data Co., a Wall Street research concern, said the GE announcement lifted the total value of buybacks announced this year to a record $65.3 billion, topping the old annual mark of $61.9 billion in 1989.

The biggest buyback announced this year was Philip Morris Cos.' plan to repurchase $6 billion of its stock over three years.

The GE board last authorized a share buyback of up to $10 billion in 1989, but ended the program after using only half the authority by the end of 1992.

During the three years that the buyback program was underway, GE's shares rose from about $28.50 to $43.25, according to figures from the company.

This year, its shares traded as high as $54.87 in February and as low as $45 in late June. Recently, the stock has traded in the high $40's per share.

"The strong outlook for our businesses, combined with their high level of cash generation, enables the company to continue its record levels of internal investment, to make complementary acquisitions for its businesses and to launch a repurchase program," Chairman John F. Welch said in a statement.

GE makes industrial equipment, aircraft engines and consumer electronic products and has a huge financial services business. …

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