The repurchase will increase the outstanding amount of shares authorized to be bought back to about $3.8 billion, the defense contractor said.
The company’s shares (NYSE: NOC) rose $3.68 (or just under 0.77%) to $480.29 Wednesday. It was up in after-hours trading, as well.
“Share repurchases will take place from time to time, subject to market conditions and management’s discretion, in the open market or in privately negotiated transactions,” the company said.
Northrop Grumman has about 900 employees in the Dayton region and across the state of Ohio. The Northrop Grumman plant at 1365 Technology Court in Beavercreek operated as an Orbital ATK plant until Northrop Grumman acquired Orbital ATK in a $7.8 billion purchase in 2018. The company has some 90,000 employees nationwide.
Companies buy back shares to reduce the number of their outstanding shares, thereby boosting the value of those shares for shareholders and investors.
Northrop Grumman isn’t alone in this strategy. Last month, General Motors announced its biggest stock buyback plan, about $10 billion in total. GM also boosted its dividend 33% and reinstated earnings guidance after accounting for newly expensive labor contracts
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