Shares of Advanced Micro Devices Inc. inched higher in after-hours trading Thursday after the chip company announced a new $8 billion buyback authorization.
The new repurchase authorization is in addition to a prior $4 billion program announced in May. AMD
AMD,
has bought back about $3 billion in stock through that earlier program, it said in a release Thursday.
“We are pleased to expand our share repurchase program based on the strength of our balance sheet and expectations for future free-cash-flow generation,” Chief Executive Lisa Su said in a release. “With our strong financial performance, we are able to increase investments to drive long-term growth while returning additional value to our shareholders.”
The company plans to fund the repurchases with cash generated through its operations. AMD said that the program doesn’t have a termination date and the company isn’t obligated to buy back any stock through it.
“Although we had expected AMD to actively work toward reducing the dilution from the Xilinx acquisition, we view this as an incremental positive,” Wells Fargo analyst Aaron Rakers wrote in a note to clients following AMD”s announcement.
Bernstein analyst Stacy Rasgon, who turned bullish on AMD share earlier in the week, highlighted the prospect of incremental buybacks as something that “could conceivably also be a contributor to accretion” in his Tuesday note to clients.
AMD shares were up less than 1% in after-hours trading Thursday after gaining 6.2% in the regular session. The stock has lost 26.1% over the past three months as the S&P 500
SPX,
has declined 8.8%.
Source: https://www.marketwatch.com/story/amd-announces-8-billion-stock-buyback-program-11645743956?siteid=yhoof2&yptr=yahoo