Symantec Increased Its Share Buyback Program in Fiscal 1Q16



Symantec allocated $2.6 billion for its share buyback program

Symantec (SYMC) followed its policy of returning value to its shareholders through dividends in fiscal 1Q16. It declared a cash dividend of $0.15 per share in fiscal 1Q16. The company also announced the authorization of another $1.5 billion that increased its stock repurchase program to $2.6 billion. In its fiscal 1Q16 earnings release, Symantec announced a $1.5 billion increase in its share buyback program.

In fiscal 1Q16, Symantec paid dividends worth $103 million, while it spent $90 million to buy back ~4 million shares.

Through share buybacks and dividends, Symantec expects to return about 120% of its after-tax domestic cash proceeds from the Veritas sale to its shareholders in the next 1.5 years.

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Symantec’s cash position got a boost from the Veritas sale

Previously in this series, we discussed that Symantec had ~$3.88 billion in cash, cash equivalents, and short-term investments in fiscal 1Q16. After the Veritas sale to The Carlyle Group for $8 billion, as announced on August 11, 2015, Symantec will likely receive ~$6.3 billion in net cash from the Veritas sale, after paying a tax bill of ~20% on $8 billion. As a result, the Veritas sale has provided Symantec with much-needed cash. In the past, Symantec approached NetApp (NTAP) and EMC (EMC) as well as some private equity firms to gauge their interest in acquiring Veritas.

You can consider investing in the Technology Select Sector SPDR Fund (XLK) and the PowerShares QQQ Trust ETF (QQQ) to gain exposure to Symantec. XLK and QQQ invest about 0.41% and 0.32% of their holdings in Symantec, respectively.


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