On Wednesday, the San Diego-based company announced that its board of directors has agreed to extend its earnings-enhancing stock buyback program. In a statement, the world’s largest maker of mobile-phone chips said it will gradually repurchase an extra $10 billion of its own shares back from the open market, effective immediately. No expiration date for the repurchasing program was provided. (See also: Why Did Trump Block Broadcom's Bid for Qualcomm?)
The new plan replaces a $15 billion buyback program that Qualcomm first announced in March 2015. According to the San Diego-based company, there is still about $1.2 billion remaining from its existing program.
Qualcomm’s shares were up 1.56% in pre-market trading on Thursday morning.
“Consistent with our commitment to return capital to our stockholders, we are pleased that our board has approved a new stock repurchase authorization, which enables our continued anti-dilutive share repurchases and provides flexibility for potential additional repurchases, as we execute on our proposed acquisition of NXP," said Steve Mollenkopf, CEO of Qualcomm.
Qualcomm has been working on completing its $43 billion acquisition of Dutch automotive chipmaker NXP Semiconductors for over 18 months. Qualcomm wants to buy NXP to reduce its reliance on smartphones, but is still awaiting regulatory clearance from China’s Ministry of Commerce to complete the deal.
Fears that the acquisition won’t go through have weighed on Qualcomm’s share price lately. The stock has fallen about 16% so far this year. (See also: How Chip Stocks May Get Killed By a Trade War)
Qualcomm hopes to get clearance for its acquisition of NXP by June 25. If Chinese regulators don’t sign off on the transaction by then, the San Diego-based company plans to use the cash it has set aside for the deal to buy back additional shares.
Qualcomm has returned more than $60 billion to shareholders since 2003 through a combination of dividends and stock repurchases. (See also: Ex-Qualcomm Chair Working on Taking It Private in Months: Reports.)