Brocade Communications Raises Buyback Authorization to $1 Billion
Today, Brocade Communications Systemsannounced its board of directors had increased the potential value of its common stock repurchases from $308 million to $1 billion.
Since the beginning of its third quarter in the fiscal year 2011, Brocade has repurchased almost $581 million of its common stock, reducing the shares outstanding by approximately 10%. This includes more than $100 million of common stock repurchases that were made during the most recent quarter of this year.
The press release from the networking equipment supplier noted that the reason behind this decision was the "company's confidence in its long-term business prospects and increasing cash flow." In the past year ,Brocade has seen its cash increase from $581 million to $790 million, a gain of approximately 35%.
Brocade CEO Lloyd Carney also added the company expected an increased amount of profitability and free cash flow, and the company "remains committed to driving shareholder value" and that he is "confident that the Board's increased authorization to the repurchase program will help meet that goal."
Brocade began aggressively repurchasing its stock in the fourth quarter of 2011, when it announced it had made more than $200 million in repurchases, compared to just $10 million in the prior quarter. Since it announced its Q3 2011 earnings, Brocade has seen its stock price rise more than 150% . Shares closed yesterday at $8.18.
The article Brocade Communications Raises Buyback Authorization to $1 Billion originally appeared on Fool.com.
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