Standard & Poor Data Shows Share Buybacks Are Down 73%
Standard & Poor's said preliminary results show that S&P 500 companies spent $30.8 billion on stock repurchases during the first quarter of 2009, down 73% from the first quarter of 2008 and was at the lowest level since the second quarter of 2003.
Howard Silverblatt, Senior Index Analyst at Standard & Poor's, said, "This was the fifth consecutive quarterly reduction in stock buybacks for the S&P 500 companies. However, a closer look at the data reveals two more telling stories. The first is that Exxon Mobil represented over a quarter of the buybacks that took place during the first quarter. The second is that 83 of the issues that repurchased shares during the fourth quarter of 2008 did not participate in a stock buyback program during the first quarter of 2009." Silverblatt cites the need to conserve capital in the current recession, combined with the uncertainty of future cash flow.
Standard & Poor's said since the buyback boom began during the fourth quarter of 2004, S&P 500 companies have spent approximately $1.8 trillion on stock buybacks compared to 2.0 trillion on Capital Expenditures, $1.0 trillion on dividends, and earning $2.3 trillion.
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