Pfizer Inc. (NYSE:PFE) disclosed that it struck a deal with Goldman Sachs Group Inc (NYSE:GS) to buy back shares worth $5 billion as part of an accelerated share repurchase program. The pharmaceutical firm indicated that it was part of its current authorized repurchase program. Pfizer also indicated that an accelerated program was taken into consideration as early as February 2.
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Settlement In Q2
Pfizer said that as much as 136 million shares would be bought back as a result of its agreement with Goldman Sachs. Pfizer plans to start buying its own shares by March 10 and the settlement of the program is predicted for this June. The company also indicated that Goldman Sachs might have to deliver additional shares of common stock on certain circumstances.
The number of shares to be delivered or the payable amount would depend on the volume-weighted average price of Pfizer stock during any given transaction period.
Struggling For EPS Growth
The corporate leadership of Pfizer is here preferring to boost the share buyback program to lift its earnings per share figure in the absence of profit growth. As far as the company is concerned, Pfizer will soon suffer from the effects of patent expiry for a number of its key products in the last few years.
EPS for Pfizer has been shrinking for a long time. Its top line has already falle 2% in 2015 while profit plunged 15% and EPS fell 13%. Adjusted income and adjusted EPS have fallen 5% and 3% respectively. Foreign currency exchange rates have also had a negative impact on EPS by seven cents a share this year.