PEORIA, Ill. (AP) -- Caterpillar Inc. (NYSE: CAT
) said on Monday that it will buy back $1 billion of its shares from French bank Societe Generale at market prices.
The planned buyback includes 11 million shares right away, at market prices. Based on Monday's stock price of around $83 per share, those shares would be worth $913 million.
Caterpillar said the final number of shares will depend on its average stock price between now and September.
The buyback is in addition to a $1 billion repurchase announced in April and finished in June, Caterpillar said.
Caterpillar's board authorized a $7.5 billion buyback in 2007. It had bought back $4.8 billion worth of shares as of the end of June, the company said.
Last week, Caterpillar reported that its second-quarter net income slid 43 percent as a slump in the global mining industry hurt equipment sales.
Chairman and CEO Doug Oberhelman said the company's balance sheet and strong cash flow "puts us in a good position to reaffirm our commitment to stockholders, even in the midst of a downturn."
On Monday, Caterpillar shares rose $1.01, or 1.2 percent, to $83.07 in morning trading. Shareholders generally like buybacks, because they reduce the number of shares outstanding, which increases the portion of the company held by the remaining shareholders.