What happened
Johnson & Johnson (JNJ -0.46%) has had its ups and downs this year, to put it tactfully. Happily for the consumer goods and healthcare giant's shareholders, Wednesday was definitely an up day. The company's share price rose by more than 2%, well outpacing the S&P 500 index's 0.3% gain, on the launch of a new investor-pleasing initiative.
So what
Before the trading day opened, Johnson & Johnson announced that its board of directors has authorized a $5 billion share repurchase program for the company's common stock. The program has no expiration date, although it could be suspended or even canceled by the company at any time. As is typical for such initiatives, Johnson & Johnson said it will repurchase its own stock from time to time, at its own discretion.
The company added that the purchased stock "will be available for general corporate purposes," without getting more specific.
It did say that it remains focused not only on keeping its investors happy, but also growing its business. "With our strong cash flow and lowest level of net debt in five years, we have the ability to invest in innovation, grow our dividend, execute strategic acquisitions, and take this action to deliver shareholder returns and drive long-term growth," said CEO Joaquin Duato in the press release.
Now what
In its press release trumpeting the stock buyback program, Johnson & Johnson also reaffirmed its 2022 guidance. The company, which is unique in being a major player in both the consumer goods and healthcare sectors, still anticipates it will post non-GAAP (adjusted) operational sales growth in the 6.5% to 7.5% range, with earnings per share rising by 8.7% to 9.7%.
