New Era of Networks Inc. (Nasdaq: NEON) hopes a 3.2 million share buyback will reassure investors.
The Englewood, Colo.-based maker of software that links corporate computer systems said Wednesday its board authorized a stock buyback of up to 10 percent of its shares during the next 12 months. As of June 30, New Era had about 32.7 million shares outstanding.
The company said it plans to purchase shares from time to time on the open market, depending on market conditions. The company will fund the buyback plan from cash and its marketable securities, totaling about $130 million as of June 30.
New Era's stock price remains far below the 52-week closing high of 75 3/8 reached in early April. The stock plunged in July after the company warned of disappointing second quarter results.
Several deals expected near the end of the June quarter failed to close, or closed for less than expected, company executives recently said. New Era also saw less revenue than expected from its MQSeries Integrator product, which is also marketed by IBM.
Shares of New Era closed up 1 7/16 Wednesday at 17 1/2 before the news of the buyback was released. Of 10 analysts surveyed by Zack's Investment Research, seven rate the New Era the equivalent of a "hold", two have it as a "moderate buy" and one has a "strong buy" rating on the stock.>