S&P 500 Stock Buybacks Decrease in Fourth Quarter of 2012 Share Repurchases Fall Slightly During the Year; Second Consecutive Quarterly Decline

NEW YORK, March 27, 2013 /PRNewswire/ -- S&P Dow Jones Indices announced today that preliminary results show that S&P 500® stock buybacks decreased 4.4% to $99.1 billion during the fourth quarter of 2012, off slightly from the $103.7 billion spent on share repurchases during the third quarter of 2012. Buybacks are still up 13.2% over the $87.6 billion spent during the fourth quarter of 2011.  For calendar year 2012, S&P 500 issues decreased their buyback expenditures by 1.5% to $398.9 billion from the $405.1 billion posted in 2011. The high mark was reached in 2007, when companies spent $589.1 billion.

"Companies continued to protect their earnings from dilution due to option execution and issuance during the fourth quarter of 2012," says Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.  "Most companies, however, have not taken the more aggressive action seen in 2006 and 2007 when buying extra shares to reduce share count was a major tool used to increase their earnings per share. While programs have generally been extended and increased potentially to fulfill the execution of older options now coming closer to expiration (at lower prices), to date most of the companies have shied away from share count reduction." 

Of significance during the fourth quarter was the participation from two issues which for years did not engage in buybacks.  Apple, which last reported buybacks in the second quarter of 2006, spent $1.95 billion on buybacks during the fourth quarter, ranking eighth highest in the Index. The second issue to initiate a share repurchase program was Berkshire Hathaway, which spent $1.30 billion on buybacks during the fourth quarter, ranking it 16th in the Index.

Buybacks remain the instrument of choice to prevent earnings dilution; however, the fourth quarter appeared to come short of the needed shares.  In the fourth quarter, 317 issues repurchased shares with 98 of them reducing their share count and only 36 reducing their count by at least 1%.  Also during the quarter, 203 issues of the issues which participated in share repurchases, saw their share count rise (107 issues rose over 1%), therefore diluting share earnings. "At this point I would expect companies to become slightly more aggressive in their buyback activity in order to get ahead of earnings dilution," commented Silverblatt.

On a sector basis, Silverblatt notes that the S&P 500 Information Technology sector has returned as the traditional leader, spending $22.8 billion on buybacks during the fourth quarter (up from $18.0 billion in the third quarter) representing 23.0% of all expenditures in the S&P 500. The greatest decline came from the Health Care sector, where M&A activity had increased the prior quarter's expenditures. The sector reported $11.6 billion in buybacks during the fourth quarter, down from the $21.8 billion reported during the third quarter.

"For 2013, S&P Dow Jones Indices anticipates that companies will continue to protect their earnings by buying back the number of shares necessary to prevent earnings dilution – something not difficult to do given record levels of cash on hand," concludes Silverblatt.

Historical S&P 500 buyback data can be found at: www.marketattributes.standardandpoors.com.

S&P Dow Jones Indices





S&P 500, $ U.S. BILLIONS





PERIOD

MARKET

AS REPORTED



DIVIDEND &


VALUE

EARNINGS

DIVIDENDS

BUYBACKS

BUYBACK 


$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

YIELD

12/31/2012 Prelim.

$12,742

$183.61

$79.83

$99.15

5.33%

9/28/2012

$12,881

$189.64

$69.48

$103.72

5.08%

6/30/2012

$12,303

$195.27

$67.31

$111.75

5.35%

3/31/2012

$12,730

$208.15

$64.07

$84.29

5.09%

12/31/2011

$11,385

$186.76

$65.89

$87.59

5.67%

09/30/2011

$10,303

$206.08

$59.20

$118.41

6.14%

6/30/2011

$12,021

$202.44

$59.03

$109.24

4.88%

3/31/2011

$12,068

$195.15

$56.08

$89.84

4.52%

12/31/2010

$11,430

$187.67

$54.85

$86.36

4.42%

09/30/2010

$10,336

$176.80

$51.26

$79.56

4.45%

06/30/2010 

$9,323

$178.00

$50.44

$77.64

4.41%

03/31/2010

$10,560

$157.85

$49.28

$55.26

3.36%

12/31/2009

$9,928

$135.14

$49.04

$47.82

3.36%

09/30/2009

$9,337

$130.37

$47.21

$34.85

3.71%

06/30/2009

$8,045

$118.22

$47.63

$24.20

5.17%

03/31/2009 

$6,928

$65.29

$51.73

$30.78

7.13%

12/31/2008

$7,852

-$202.11

$62.19

$48.12

7.48%

09/30/2008

$10,181

$86.16

$61.44

$89.71

6.73%

06/30/2008

$11,163

$112.15

$61.94

$87.91

6.88%

03/30/2008

$11,511

$135.24

$61.72

$113.90

7.25%

12/31/2007

$12,868

$68.53

$67.09

$141.71

6.49%

09/30/2007

$13,470

$133.66

$61.21

$171.95

5.89%

06/30/2007

$13,350

$194.30

$59.76

$157.76

5.44%

03/31/2007

$12,706

$190.75

$58.53

$117.70

5.35%

12/31/2006

$12,729

$181.65

$61.79

$105.18

5.16%

 

 

S&P Dow Jones Indices


S&P 500 20 LARGEST Q4 2012 BUYBACKS, $ MILLIONS 


Company

SECTOR

Q4,'12

BUYBACKS




Q4,'12-Q4,'04

Exxon Mobil 

Energy

$5,254

$194,970

AT&T

Telecommunication Services

$4,378

$34,188

Internat'l Business Machines

Information Technology

$3,007

$96,025

Oracle 

Information Technology

$2,996

$26,879

Wal-Mart Stores 

Consumer Staples

$2,943

$45,101

General Electric 

Industrials

$2,835

$45,431

Philip Morris Internat'l

Consumer Staples

$1,968

$27,808

Apple

Information Technology

$1,950

$2,305

Microsoft

Information Technology

$1,658

$107,513

Goldman Sachs Group

Financials

$1,524

$41,328

Yahoo! 

Information Technology

$1,452

$10,699

Procter & Gamble 

Consumer Staples

$1,400

$63,762

DIRECTV

Consumer Discretionary

$1,347

$23,674

Wells Fargo 

Financials

$1,321

$21,089

Visa 

Information Technology

$1,317

$21,143

Berkshire Hathaway 

Financials

$1,296

$1,363

Time Warner

Consumer Discretionary

$1,276

$31,749

Amgen

Healthcare

$1,217

$34,764

Chevron

Energy

$1,180

$28,774

Merck

Healthcare

$1,152

$12,564

Top 20


$41,471

$871,128

S&P 500


$99,148

$3,016,684

Top 20 % of S&P 500


41.83%

28.88%


About S&P Dow Jones Indices

S&P Dow Jones Indices LLC, a subsidiary of The McGraw-Hill Companies, Inc., is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average(SM), S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of institutional and retail investors. More assets are invested in products based upon our indices than any other provider in the world. With over 830,000 indices covering a wide range of asset classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com

Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"), a subsidiary of The McGraw-Hill Companies, Inc. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones").  These trademarks have been licensed to S&P Dow Jones Indices LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively "S&P Dow Jones Indices") do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.

SOURCE S&P Dow Jones Indices



RELATED LINKS
http://www.spdji.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.