AmerisourceBergen Corporation (NYSE:ABC) recently declared that its Board of Directors has authorized a special $2.4 billion share repurchase program intended to further enable the execution of the Company’s formerly declared warrant hedging strategy. The new special program will be used to further mitigate the dilutive effect on the ownership interests of stockholders that may result from the issuance of common stock upon exercise of the warrants issued in March 2013.
The Company recently accomplished the April 2015 $1.0 billion special share repurchase program, and had formerly accomplished the May 2014 $650 million special share repurchase program. The Company anticipates that the new $2.4 billion program should be sufficient to offset the remaining share dilution from future warrant exercises, with about $140 million predictable to be used in connection with call options expiring in October 2015, about $700 million predictable to be used in connection with capped calls expiring in 2016, and about $715 million predictable to be used in connection with capped calls expiring in 2017. The remainder available under the new special program would be used for discretionary repurchases intended to supplement these hedging activities.
“We are very happy that we have recently made noteworthy progress towards further offsetting the predictable impact from warrant exercises in 2017, after having essentially fully covered the predictable impact from the 2016 warrants during our June 2015 quarter,” said Steven H. Collis, AmerisourceBergen President and Chief Executive Officer. “With our cash flow generation, we have tremendous flexibility to mitigate the remaining impact of the warrants either through share repurchases, hedging activities, or planned acquisitions.”
Share repurchases under the new special program will be funded by proceeds from the warrant exercises, and by cash on hand. Share repurchases under the special program are predictable to take place in the open market in addition to by other means, such as through the exercise of the call options or capped calls that the Company has formerly entered into, or other contracts we may enter into in the future. The share repurchases are predictable to occur over an extended period of time, subject to market conditions.
As formerly revealed, the Company intends to continue to exclude the impact of the share repurchases under its special programs from the presentation of adjusted diluted earnings per share from ongoing operations until the warrants are exercised or expire. The exclusion of the special share repurchases is consistent with the Company’s exclusion of the accounting dilution resulting from the impact of the warrants in the calculation of the Company’s adjusted diluted earnings per share. As a result, share repurchases under the special programs will not have an impact on the Company’s expectations for the range of its adjusted diluted earnings per share from ongoing operations for fiscal 2015 or fiscal 2016, which were both formerly revealed in its earnings release dated July 23, 2015. The adjusted earnings per share guidance from ongoing operations continues to comprise an assumption that the Company will repurchase $300 million of its common stock in fiscal 2015 and $300 million in fiscal 2016 under its formerly declared regular share repurchase programs, subject to market conditions.
As formerly revealed, auxiliaries of Walgreens Boots Alliance, Inc. were collectively issued warrants to purchase up to 22,696,912 shares of the Company’s common stock at an exercise price of $51.50 per share exercisable during a six month period starting in March 2016 and warrants to purchase up to 22,696,912 shares of the Company’s common stock at an exercise price of $52.50 per share exercisable during a six-month period starting in March 2017.
AmerisourceBergen is one of the largest global pharmaceutical sourcing and distribution services companies, assisting both healthcare providers and pharmaceutical and biotech manufacturers improve patient access to products and enhance patient care. With services ranging from drug distribution and niche premium logistics to reimbursement and pharmaceutical consulting services, AmerisourceBergen delivers innovative programs and solutions across the pharmaceutical supply channel in human medicine and animal health.
U.S. Stocks NEWS: On Monday, Shares of Texas Instruments Inc. (NASDAQ:TXN), lost -0.73% to $47.45.
Texas Instruments Incorporated said it will raise its quarterly cash dividend by 12 percent, from $0.34 per share to $0.38, or $1.52 annualized. The higher dividend will be payable November 16, 2015, to stockholders of record on October 30, 2015, contingent upon formal declaration by the board of directors at its regular meeting in October.
The board of directors also authorized the company to repurchase an additional $7.5 billion of its common stock over time. This is in addition to about $1.8 billion of formerly authorized repurchases that remained at the end of June 2015.
Dividend improvements and share repurchases are both part of TIs capital administration strategy. The company has raised dividends each year for the past 12 years, and through consistent share repurchases has reduced outstanding shares by 40 percent since the starting of 2005.
Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. It operates through two segments, Analog and Embedded Processing.
Shares of Marathon Oil Corporation (NYSE:MRO), inclined 1.70% to $16.11, during its last trading session, with climbing oil prices after U.S. drillers reduced their oil rigs for the third week in a row.
A report from Goldman Sachs shows that production will be cut by over 250,000 barrels a day between the second and fourth quarters of this year, Reuters stated.
However, oil prices are forecast to stay at low levels as other global producers in the Middle East and Russia continue to pump, CNBC.com said.
Marathon Oil Corporation operates as an energy company. It operates in three segments: North America Exploration and Production, International Exploration and Production, and Oil Sands Mining. The North America Exploration and Production segment explores for, produces, and markets crude oil and condensate, natural gas liquids, and natural gas in North America.
Shares of Hertz Global Holdings, Inc. (NYSE:HTZ), inclined 1.71% to $18.44, during its last trading session.
Hertz Global Holdings has been assigned an average recommendation of “Hold” from the nine analysts that are presently covering the stock, MarketBeat.Com reports. Two equities research analysts have rated the stock with a sell recommendation, two have given a hold recommendation and five have given a buy recommendation to the company. The average 12-month price objective among analysts that have covered the stock in the last year is $23.67.
Hertz Global Holdings, Inc., through its auxiliaries, rents and leases cars and trucks in the United States and internationally. It operates in four segments: U.S. Car Rental, International Car Rental, Worldwide Equipment Rental, and All Other Operations.
Finally, Shares of Brocade Communications Systems, Inc. (NASDAQ:BRCD), ended its last trade with -0.48% loss, and closed at $10.37.
Brocade Communications Systems declared the Brocade SDN Controller 2.0, a commercial distribution of the OpenDaylight (ODL) controller based on the Lithium ODL release, and two new software-defined networking (SDN) applications Brocade Topology Manager and Brocade Flow Manager. These new solutions reinforce Brocades leadership in open source SDN, providing greater innovation, interoperability and choice while eliminating vendor lock-in for customers.
Brocades latest open source SDN controller distribution delivers enhancements to meet data center requirements for improved interoperability and orchestration counting:
- Enhancements to the Open vSwitch Database (OVSDB) interface and the OpenStack Modular Layer 2 plug-in (certified in Red Hats Juno distribution) enabling cloud providers to completely use an open software stack to manage their data center infrastructure
- OpenDaylight clustering for improved scalability and stability
- A new user interface for applications to provide a consistent and intuitive view of the network under control.
New SDN applications complement this latest release of the Brocade SDN Controller. The Brocade Topology Manager, a free SDN application, displays discovered network topology, allowing administrators to create a list of nodes and conduct simple searches for nodes. The Brocade Flow Manager extends the capabilities of the Brocade Topology Manager by enabling users to view and interact with the network topology using near-real-time information to perform traffic engineering and network segmentation based on end-to-end flow views. In addition, the new Brocade SDN Controller supports the recently-declared Brocade Flow Optimizer to intelligently manage traffic flow and proactively mitigate network attacks.
Brocade Communications Systems, Inc. provides storage area networking (SAN) and Internet protocol networking solutions for businesses and organizations worldwide. It operates through SAN Products, IP Networking Products, and Global Services segments.
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