Thermo Fisher Has Bought Back $1 Billion of Stock Under Current Program

— Jeff Ward, Lehigh Valley News Briefs

Thermo Fisher Scientific, a maker of laboratory and medical equipment with Lehigh Valley operations, has bought back $1 billion of stock under its current buyback program.

The Waltham, Massachusetts-based company said in a statement that 1.9 million shares were acquired.

Still, $3 billion remains under Thermo’s current buyback authorization.

Buybacks can create demand for shares, but companies are not obligated to complete any announced buyback. If many shares are bought back and others are not issued, earnings per share may increase, as earnings are divided among fewer shares.

Sometimes, critics say companies have bought shares back at high prices, and suggest that the corporation should invest extra cash in operations. It’s a capital allocation issue.

Apple is noted for its large buybacks.

As for Thermo, $1 billion is a lot of money but the company’s market capitalization is $202.4 billion at current prices, so the buyback accounts for a half of a percent of its value.

Shares of Thermo Fisher (NYSE:TMO) traded at $529.38 at 3:47 p.m., down $5.04 on the day. The shares have traded as high as $627.88 and as low as $488.02 in the last 52 weeks.

— Disclosure: I own Thermo shares as part of a buy-and-hold strategy.