S&P 500 Fourth Quarter Buybacks Rebound 37%; Post 59.5% Decline in 2009

NEW YORK, March 29 /PRNewswire/ -- Standard & Poor's, the world's leading index provider, announced today that preliminary results show that S&P 500 stock buybacks for the fourth quarter of 2009 increased 37.2% to $47.8 billion from the $34.8 billion registered during the third quarter of 2009. For all of 2009, preliminary data shows that S&P 500 buybacks declined 59.5% to $137.6 billion (from the $339.6 billion posted in 2008), and are off 76.6% from the record annual high of $589.1 billion posted in 2007.

"Companies are getting back in the buyback mode, with many boards reauthorizing buybacks but adding that actions will be dictated by market conditions," says Howard Silverblatt, Senior Index Analyst at S&P Indices.  "Increased activity in the fourth quarter was primarily the result of companies heading off possible earnings dilution due to an anticipated increase in the number of employee exercised stock options, which is currently being fueled by higher market prices."

"With market gains holding so far this year and S&P non-financials holding a record $831 billion in available cash at year-end, companies are very capable of controlling earnings dilution," continues Silverblatt. "While most have not shown an appetite to reduce share count and increase earnings-per-share in the manor they did in 2006 and 2007, we have seen notable share count reductions in over fifty S&P 500 issues in the fourth quarter, most notably in the Consumer Discretionary sector."

S&P Indices also determined that, during the fourth quarter of 2009, 214 issues participated in stock buyback programs, up from the 195 that did so in the third quarter and the 169 that participated in the second quarter. Additionally, for the third quarter in a row, none of the issues made the top 20 historical list for largest stock buybacks.

"At this point most companies appear to be more willing to commit their record cash holdings," adds Silverblatt.  "The first quarter saw more companies increase their dividends, with eight issues having enough confidence in their future earnings to initiate a payment. Still, we're not out of the woods just yet.  Markets and the economy remain less than stable, with many companies still not yet convinced that it is safe to come out and spend."

On a sector basis, S&P Indices notes that Information Technology now accounts for 31.9% of all buybacks, with Consumer Staples accounting for 20.7%.  Both Energy and Telecommunications were the only sectors to reduce their Q4 buyback expenditures, with Exxon Mobil reducing their expenditures 44% to a level last seen in Q2 2004, but still posting its 38th consecutive quarter of share count reduction.

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

    
    
    S&P Indices                                                        
    S&P 500, $ U.S. BILLIONS
                                       AS                                
    PERIOD         MARKET  OPERATING REPORTED                    DIVIDEND &
                    VALUE  EARNINGS  EARNINGS DIVIDENDS BUYBACKS   BUYBACK
                      $        $        $         $        $
                  BILLIONS BILLIONS  BILLIONS  BILLIONS BILLIONS     YIELD
                                                                      
    2009            $8,559  $488.49   $445.29   $195.61  $137.64     3.89%
    2008           $10,177  $435.18   $131.43   $247.29  $339.65     5.77%
    2007           $13,098  $731.38   $587.24   $246.58  $589.11     6.38%
    12/31/2009 P    $9,928   140.49   $131.41    $49.04   $47.82     3.36%
    09/30/2009      $9,337  $139.37   $130.37    $47.21   $34.85     3.71%
    06/30/2009      $8,045  $120.85   $118.22    $47.63   $24.20     5.17%
    03/31/2009      $6,928   $87.78    $65.29    $51.73   $30.78     7.13%
    12/31/2008      $7,852   -$0.78  -$202.11    $62.19   $48.12     7.48%
    09/30/2008     $10,181  $142.90    $86.16    $61.44   $89.71     6.73%
    06/30/2008     $11,163  $148.43   $112.15    $61.94   $87.91     6.88%
    03/30/2008     $11,511  $144.63   $135.24    $61.72  $113.90     7.25%
    12/31/2007     $12,868  $133.38    $68.53    $67.09  $141.71     6.49%
    09/30/2007     $13,470  $184.13   $133.66    $61.21  $171.95     5.89%
    06/30/2007     $13,350  $213.65   $194.30    $59.76  $157.76     5.44%
    03/31/2007     $12,706  $200.23   $190.75    $58.53  $117.70     5.35%
    12/31/2006     $12,729  $197.35   $181.65    $61.79  $105.18     5.16%
    
    
    
    S&P Indices                                                              
    S&P 500 SECTOR                                                           
     BUYBACKS                               
    SECTOR $                                (high)   Q4,'09   FULL    Q4,'09 
     MILLIONS       Q4,'09  Q3,'09  Q4,'08  Q3,'07   CHG OVR  2009    CHG OVR 
                                                     Q3,'09   CHANGE  Q3,'07  
                                                                             
    Consumer                                                                 
     Discretionary  $5,146  $4,560  $1,847  $34,902   12.86% -58.38%  -85.25%
    Consumer                                                                 
     Staples        $9,900  $6,699  $4,627  $16,088   47.78% -31.20%  -38.46%
    Energy          $2,655  $4,520 $11,809  $14,717  -41.27% -65.90%  -81.96%
    Financials      $3,142  $2,108  $4,292  $27,762   49.05% -76.16%  -88.68%
    Healthcare      $7,512  $3,414  $5,453  $18,660  120.02% -38.83%  -59.74%
    Industrials     $2,843  $2,026  $7,524  $17,521   40.35% -79.20%  -83.77%
    Information                                                              
     Technology    $15,253 $10,535 $10,968  $23,904   44.78% -54.84%  -36.19%
    Materials         $365    $223  $1,433   $6,503   63.79% -86.04%  -94.38%
    Telecommun-                                                              
     ication                                                                 
     Services         $117    $139     $87   $3,947  -16.06% -96.90%  -97.04%
    Utilities         $885    $624     $79   $7,943   41.80% -32.86%  -88.86%
    TOTAL          $47,818 $34,848 $48,117 $171,947   37.22% -59.47%  -72.19%
    
    
    
    S&P Indices                                                            
    S&P 500 20 LARGEST Q4 2009 BUYBACKS, $ MILLIONS, CURRENT MEMBERSHIP    
    COMPANY                    SECTOR                Q4,'09  Q4,'04-Q4,'09 
                               Information                                 
    Microsoft Corp              Technology           $3,867        $81,777 
    Int'l Business Machines    Information                                 
     Corp                       Technology           $3,064        $53,609 
                               Information                                 
    Hewlett-Packard Co          Technology           $2,713        $39,653 
    Exxon Mobil Corp           Energy                $2,372       $138,754 
    Wal-Mart Stores Inc        Consumer Staples      $2,171        $20,231 
    The Travelers Co           Financials            $1,539         $9,599 
    The Coca-Cola Co           Consumer Staples      $1,512         $9,173 
    Procter & Gamble Co        Consumer Staples      $1,406        $44,643 
                               Information                                 
    Cisco Systems, Inc          Technology           $1,375        $40,506 
    Philip Morris                                                          
     International, Inc        Consumer Staples      $1,367        $10,881 
    Amgen Inc                  Healthcare            $1,211        $18,030 
    Johnson & Johnson          Healthcare              $958        $23,226 
    CVS Caremark Corp          Consumer Staples        $938         $7,870 
    WellPoint Inc              Healthcare              $827        $16,951 
    Biogen Idec Inc            Healthcare              $694         $5,160 
    Zimmer Holdings Inc        Healthcare              $519         $3,040 
                               Consumer                                    
    Lowe's Companies Inc        Discretionary          $500         $5,298 
    St. Jude Medical Inc       Healthcare              $500         $3,000 
    The Chubb Corp             Financials              $496         $5,944 
    Lockheed Martin Corp       Industrials             $489        $10,603 
    Top 20                                          $28,518       $547,948 
    S&P 500                                         $47,818     $1,951,627 
    Top 20 % of S&P 500                               59.64%         28.08%
    

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