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AlliedSignal buys back stock
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May 29, 1998: 11:45 a.m. ET
Blue chip technology firm to spend $2.2 billion to repurchase shares
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NEW YORK (CNNfn) - With a strong cash flow position and no acquisition prospects in sight, blue chip technology manufacturer AlliedSignal Corp. said Friday it will invest up to $2.2 billion in its own stock.
The Morris Township, N.J.-based company will repurchase the stock under a two-year plan to reclaim greater control over the company.
"This is the first time we have adopted a share buyback plan beyond our requirements for shares issued under employee benefit plans and for acquisitions," AlliedSignal Chairman and Chief Executive Lawrence A. Bossidy said.
He added that at current market prices, repurchasing the company's stock "is more attractive than most acquisition opportunities."
Increased free cash flow from operations will be used to finance the plan.
The timing and total number of shares repurchased will depend on market conditions, the company said.
Under a 1996 authorization by AlliedSignal's board of directors, roughly 68 million shares are available for repurchase. The company has 565 million shares outstanding.
AlliedSignal (ALD) shares rose 1-11/16 to 42-13/16 in midday trading Friday on the New York Stock Exchange.
AlliedSignal makes aerospace and automotive products, chemicals, fibers, plastics and advanced materials. With $14.5 billion in 1997 sales, the company ranks among the top 100 of the Fortune 500 companies, and is one of the 30 companies comprising the Dow Jones Industrial Average.
In April, the company posted a 16 percent jump in first-quarter income to 52 cents a share, up from 45 cents a share in the year-ago quarter. Analysts polled by First Call had expected earnings of 51 cents a share.
Last fall, the company announced plans to reorganize into 11 different business units, drop its aerospace, automotive and engineered materials units, and cut some 800 jobs.
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AlliedSignal Corp.
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