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The stock buyback boom continued apace in the first-quarter earnings season that is now drawing to a close, with U.S. companies announcing $6.1 billion of buybacks a day, according to Trim Tabs Investment Research.
That’s second only to the roughly $6.6 billion-a-day announced with fourth-quarter earnings, and is a strong indicator of exactly what companies are planning to do with savings generated by the tax revamp that was signed into law in December, said Trim Tabs.
“The buyback boom early this year confirms our view that the main use of corporate America’s tax savings will be takeovers and stock buybacks rather than capital investment or hiring,” the company said in a note.
Companies announced new stock buyback programs totaling $183.4 billion in the April to May earnings season, according to the research firm, second only to the $191.4 billion announced in the January to February season.
Five companies accounted for 75% of total volume, led by Apple Inc. which announced a $100 billion program. That was followed by Broadcom Inc. with a $12 billion program, Facebook Inc. with $9 billion, Qualcomm Inc. at $8.8 billion and T-Mobile US Inc. at $7.5 billion.
On Monday, Micron Technologies Corp. said it would buy back up to $10 billion of its own stock. The news sent that stock up 8% in early trade and put it on track for another record.