Stock buybacks up 2.5 percent in fourth quarter on year -S&P

By Ryan Vlastelica

NEW YORK, March 23 (Reuters) - Companies in the S&P 500 spent $132.6 billion on stock buyback programs in the fourth quarter of 2014, according to data from S&P Dow Jones Indices, a rate that represents a year-over-year increase but also a sequential decline.

The fourth-quarter rate was up 2.5 percent from the fourth quarter of 2013 but down 8.7 percent from the third quarter of 2014. For the full year, repurchasing programs for companies in the benchmark index jumped 16.3 percent to $553.3 billion, with much of the activity coming from technology companies, especially Apple Inc.

While buybacks fell in the fourth quarter from the third, "the number of issues reducing their share count by at least 4 percent year-over-year, and therefore increasing their [earnings per share] by at least that amount, continues to be in the 20 percent area - a significant level," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

According to S&P, 308 companies in the S&P 500 reduced their share count during the fourth quarter, up from 257 in the third quarter and 276 in the fourth quarter of 2013.

In 2014, 27.96 percent of the buyback activity came from the information technology sector. That was largely driven by Apple, which bought back $45 billion of its stock during the year - about 8 percent of the S&P 500's total buybacks. Intel Corp spent $10.8 billion on buybacks during the year.

Among other heavy repurchasing sectors, the S&P consumer discretionary sector was responsible for 14.78 percent of the year's buybacks, while financials made up 13.63 percent.

While reducing one's share count through buybacks can provide a tailwind for earnings, the impact may not be widely felt this quarter given the recent strength in the U.S. dollar, which could hurt the profits of companies with overseas exposure.

(Editing by Bernadette Baum)