WASHINGTON May 16 U.S. arms maker Northrop
Grumman Corp said on Thursday it plans to buy back 25
percent of its outstanding shares by the end of 2015, after its
board of directors approved $4 billion in further share
The board's action increased the total amount available for
share buybacks to $5 billion. Northrop said it had about 235
million shares outstanding at the end of March.
"Today's action and yesterday's dividend increase reflect
confidence in our performance and our belief that our share
repurchase program continues to create value for our
shareholders," said Northrop Chief Executive Wes Bush.
Northrop on Wednesday increased its dividend by 11 percent
to 61 cents per share.
Northrop said the moves were part of an effort to increase
shareholder value that began with the sale or spin-off of
several units in recent years.
Northrop shares were 48 cents higher at $79.50 in
post-market trading after closing at $79.02 on the New York
Northrop spokesman Randy Belote declined comment when asked
if the share repurchases were aimed at preparing the company for
a merger or sale.
"We don't comment on any strategic options," Belote said.
Top Pentagon officials have said they expect consolidation
among smaller and mid-sized companies in the U.S. defense
industry given projected declines in spending.
Thus far, they have said that the number of companies at the
top of the sector is about right, after a big wave of
consolidation during the 1990s, but officials say they may have
to revisit the matter if massive additional defense spending
cuts remain in force.
Northrop said the share purchases would take place at
management's discretion and be subject to market conditions, in
the open market or in privately negotiated transactions.
Cash balances and free cash flow would be used to fund the
repurchases, Northrop said. It said it may issue debt under its
current shelf registration in order to support accelerated share