Boeing Co said on Monday it would buy up to $7 billion of its own stock, one of the plane-maker's largest repurchase plans on record, but kept its cash dividend unchanged.
The announcement comes amid a three-month slide in Boeing shares, which have lost about 10 percent of their value after hitting an all-time high in July, as production problems have delayed the company's new 787 Dreamliner.
Boeing's shares added to gains shortly after the announcement, and closed up 97 cents at $96.99 in afternoon trading on the New York Stock Exchange. They hit their all-time high of $107.80 on July 25.
The plan allows the repurchase of about 9 percent of Boeing's outstanding shares at current prices. Boeing's biggest plan on record authorized the repurchase of about 15 percent of outstanding shares in 1998, the year after it took over rival McDonnell Douglas Corp.
Boeing suspended stock buybacks after the attacks of September 11 and resumed only in 2004. Since then, it has bought about $8 billion of its own stock. Its last repurchase authorization, which is nearing completion, was for $3 billion worth of stock, set in August 2006. The new authorization has no specified time limit.
"Our strong financial performance allows us to return value to our shareholders while continuing to invest in our growth and becoming more productive," said Boeing Chief Executive Jim McNerney, in a statement. "We are executing a balanced cash deployment strategy that's serving Boeing and its shareholders well."
The Chicago-based company reported third-quarter profits up almost 60 percent to $1.1 billion last week, helped by brisk sales of its commercial jets. But it scaled back its revenue forecast for next year due to delays on its 787 Dreamliner and slowing growth at its defense unit.
The world's biggest-selling jet maker, which is also the No. 2 U.S. defense contractor, earlier this month said its hot-selling 787 would be at least six months late as it wrestles with uncompleted work from suppliers, integrating the plane's software and an acute shortage of bolts. ( Reuters )