Shares of Qualcomm rose over 2% in pre-market trading on Tuesday after the company disclosed a substantial capital-return package that includes a fresh $20 billion stock buyback authorization and a modest dividend increase.
The board of directors approved a raise in the quarterly cash dividend from $0.89 to $0.92 per common share. Qualcomm said this higher quarterly payout applies to dividends payable after March 26, 2026, which translates to an annualized dividend of $3.68 per share.
In tandem with the dividend action, Qualcomm's board authorized a new $20 billion stock repurchase program that takes effect immediately. That authorization is in addition to the firm’s existing repurchase program announced in November 2024, which the company reports has about $2.1 billion of buyback capacity remaining. The newly approved program does not include an expiration date.
Qualcomm noted that the specific timing and the number of shares repurchased under the new authorization will be determined by market conditions and other factors. The company did not specify a schedule or target pace for the repurchases.
In a statement, Cristiano Amon, president and CEO of Qualcomm, said: "Consistent with our commitment to return capital to our stockholders, we are pleased that our board has approved an increase to our quarterly dividend and a new stock repurchase authorization."
The combination of a larger authorized buyback and a higher quarterly dividend represents a direct return of capital to shareholders. Market reaction was immediate, with Qualcomm shares trading higher in pre-market hours following the announcement.
Summary
Qualcomm's board approved a $20 billion open-ended stock repurchase authorization and raised the quarterly dividend to $0.92 per share, effective for dividends payable after March 26, 2026, bringing annualized payouts to $3.68. The new repurchase authorization supplements an existing program from November 2024 that has roughly $2.1 billion remaining. Management said repurchase activity will depend on market conditions and other factors.
Key points
- Board approved a $20 billion stock repurchase authorization effective immediately; the program has no expiration date.
- Quarterly dividend raised from $0.89 to $0.92, effective for dividends payable after March 26, 2026, equating to an annualized $3.68 per share.
- The new buyback adds to an existing November 2024 repurchase program with about $2.1 billion remaining; repurchase timing and quantity depend on market conditions.
Risks and uncertainties
- Timing and volume of share repurchases are not specified and will vary based on market conditions and other factors, creating uncertainty about the pace of capital return.
- The company has not provided a repurchase schedule or target number of shares under the new authorization, leaving the ultimate magnitude of buybacks unclear.
Information in this article is limited to the details provided by the company announcement.