UPS Buying Back $10 Billion of Stock - Most Impressive!
United Parcel Service, Inc. : United Parcel Raises Quarterly Dividend by 8.8%; Reauthorizes Stock Buyback Plan for $10 Billion
02/14/2013| 05:34pm US/Eastern
By Tess Stynes
United Parcel Service Inc.'s (UPS) board raised the shipping giant's quarterly dividend by 8.8% on its class A and class B shares, and approved additional stock buybacks of $10 billion.
Chairman and Chief Executive Scott Davis said, "This dividend increase reflects the power of the UPS business model to deliver consistent returns to shareowners," while noting that the company generated nearly $5.4 billion in free cash flow last year.
The board also reauthorized UPS's share-repurchase program for $10 billion. The new authorization replaces one approved last year and has no expiration date. In May, UPS's board had approved a $5 billion stock-buyback authorization.
UPS last month said it expects a "below-trend" global economic recovery this year, though it flagged recovering business from a consumer-electronics sector that has weighed on package shippers. The company also pledged to buy back more stock following the collapse of its $7 billion plan to acquire Dutch parcel-delivery company TNT Express N.V. (TNTEY, TNTE.AE), which was blocked by European regulators on competition grounds.
UPS last month said it expects buybacks to rise to $4 billion this year from $1.5 billion as it moves on from the failure of the TNT deal.
The quarterly dividend was raised to 62 cents a share, an increase of a nickel a share. UPS said its dividend has more than tripled since 2000.