S&P 500 companies spent a combined $81 billion to buy back their stock in the second quarter, up 92% from the $42 billion they spent a year earlier, according to data released today by Standard & Poor's. Some 295 companies reported buying back shares in the second quarter, although more might have brought back shares in amounts that were too small to break out in financial reports, Howard Silverblatt, equity market analyst, said in an interview.
S&P 500 "companies have plenty of cash on the sidelines ... and they're being pushed by investors to use that cash," Mr. Silverblatt said. Companies are using buybacks to reduce their share count, enhancing shareholder equity and increasing earnings per share, he added.
Standard & Poor's expects the strong buyback activity among S&P 500 companies to continue for the rest of 2005.
The S&P 500 companies had a combined $608 billion in cash as of today, compared with $634 billion as of June 30, he said.