Boeing confirms major share buyback

<p>A $10 billion share buyback has been confirmed by Boeing.</p>

A major share buyback and a rise in its quarterly dividend has been confirmed by Boeing.

Just a few days after Air Canada announced that it has ordered 61 of the manufacturer's MAX planes in a sale worth $6.5 billion (£4.2 billion), Boeing stated that its dividend will increase by about 50 per cent.

This means it will rise to 73 cents a share, which will be paid in March next year, with the firm's stocks up in after-hours trading in the US as a result of the news.

Boeing chief executive Jim McNerney said in a statement: "These actions reflect sustained, strong operational performance by our businesses, increasing cash flow and our confidence in the future."

As well as the large dividend being paid to shareholders, Boeing announced it will be launching a $10 billion buyback of its own shares, which is the biggest in its history.

Shares in Boeing are now up by around 79 per cent for the year, making it one of the most successful stocks on any global markets. Today (December 17th), its stocks are 1.9 per cent higher in after-hours trading on the New York Stock Exchange.

Company future

Boeing executive vice-president and chief financial officer Greg Smith said: "Our balanced cash deployment strategy provides increased dividends and share repurchase authorization to deliver consistent returns to our shareholders while maintaining investment in productivity and innovation for future growth."

It was added by the company that it is currently expected the share repurchases will be made over the next two to three years, while it was revealed by executives that repurchases can be made on the open market or in privately negotiated transactions.

The Air Canada contract win was a major boost for Boeing and a win over its main rival Airbus, which previously had the contract to supply planes to the airline. Calin Rovinescu, chief executive of Air Canada, said in a statement that the new aircraft will be more efficient in terms of fuel usage and this will be "a key element of our ongoing cost transformation programme".

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.